Streamticker 2006: The Deals That Reshaped the Online Video Space
Comcast Acquires the Platform
The Platform, based in Seattle, has had a great year: it expanded its downtown Seattle location, attracting additional talent that could walk to work instead of making the typical drive-time commute; finished a second round of funding, tagged at about $8 million and led by Boston-based Spark Capital; and announced mid-year that it was set to be acquired by Comcast.
CEO Ian Blaine has been here before: in the late 1990s he started a firm and sold it to NBCi, the interactive arm of the Peacock. The relationship continues forward into this current company, as one of his customers at The Platform is CNBC. The company also powers video content, much of it Flash-based, for CourtTV, National Geographic, Scripps (including HGTV and The Food Network), ABC News, a number of enterprises, and of course Comcast.
One of The Platform’s main attractions to Comcast was a robust media platform dubbed MPS, or Media Publishing System. The scalability should prove beneficial to the acquirer as it is reported that Comcast wants to expand beyond a portal for its cable subscribers into a portal available to anyone with broadband access.
The Platform also powers V Cast, Verizon Wireless’ media portal, so the acquisition of The Platform has the potential to allow Comcast to go well beyond a standard portal. While it’s too early to say whether Comcast might want to create the first cable-operator MVNO (Mobile Virtual Network Operator) scenario or go after Sling Media’s placeshifting market, either scenario is possible with The Platform acquisition.
Terms of the deal were not disclosed but appear to be approximately $100 million, with The Platform operating as a wholly owned subsidiary; Ian Blaine reports to Sam Schwartz, executive vice president, Comcast Interactive Media.
Limelight Gets $130 Million in Funding
In July 2006, CDN Limelight Networks announced an oversubscribed funding round, led by Goldman Sachs, for $130 million in funding. Company co-founder and chief strategy officer Michael Gordon said the company intends to use the new funding to add capacity to its network.
The funding amount attracted significant attention, as did three other facts: The fact that Akamai had filed a lawsuit several days prior to the funding round’s closing, stating that Limelight was infringing on Akamai’s patents with "malicious intent"; the fact that then-CEO Bill Rinehart had been fined and barred by the SEC in 2001 (when he was a VP at Critical Path) from acting as a director or officer of a publicly-traded company for a period of five years; and the fact that Goldman Sachs had gained 53% of the company for its part in the funding deal and had also requested Rinehart’s removal from the CEO position as a condition of the sale.
The latter was addressed on October 31, when Jeff Lunsford took over as CEO and chairman. Lunsford had experience with several internet startups, two of which went public and one of which was acquired. Industry pundits think either scenario is possible for Limelight, with more bets being placed on an acquisition of the company by Akamai, which is already publicly traded (though Akamai’s acquisition of Nine Systems in mid-November might make that unlikely).
While working on this story, I was cold-called by a business development manager at Limelight asking if our company was interested in knowing about Limelight’s reseller options and referral commissions. Shortly after a 20-minute conversation presenting the options, I received an email stating that Limelight’s policies had recently changed and the company was no longer allowing others to resell Limelight’s services (even for aggregation beneath the $500 minimum monthly commitment Limelight requires of its users) and that referral commissions were no longer being honored. Yet, more than a week later (mid-November), a link on Limelight’s site for partner and reseller information is still active. Perhaps Limelight’s reorganization is still ongoing.
Telestream Acquires Popwire
In August, Telestream announced its acquisition of Sweden-based Popwire, a company that created transcoding products similar to Telestream’s own FlipFactory. By the time IBC 2006 rolled around in September, Telestream was able to showcase its rapid integration of the Popwire product line, positioning Telestream as a company with transcoding solutions for any price point.
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From A(OL) to V(erizon) we look at the mergers and acquisitions that mattered in the last year. Here's a look back, with an eye toward what they portend for the future.
31 Mar 2016