Merger Frenzy for Web Media

NEW YORK The newfound interest of traditional media companies in the fast-growing Internet sector has set off a sharp rise in merger activity, according to a new report.

Jordan, Edmiston Group, a New York merger advisory company, said the number of online media deals rose to 70 in the first three quarters of this year. The same period last year saw 61 mergers and acquisitions.

The value of Internet deals has grown even faster, with the 70 2005 deals worth $8.1 billion, compared to $3.3 billion during the same period in 2004.

The top third-quarter deals in the space include IAC’s $1.9 billion Ask Jeeves acquisition, News Corp.’s $650 million purchase of IGN and eBay buying for $620 million.

A major factor driving the spate of deals, according to Jordan, Edmiston, is “the convergence of traditional media and interactive media, as traditional media companies continue to look for growth through Internet-based business models.”

The actual amount of merger activity was higher in the quarter, though, as Jordan, Edmiston only tallies deals that have closed. The report therefore does not include News Corp.’s pending $580 million deal for Intermix or ValueClick’s $214 million buy of Fastclick, which closed today.