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More Web M&A Expected

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NEW YORK The recent spate of online media acquisitions is likely to continue, as traditional media look to high-growth outlets and a fragmented market consolidates, according to the head of a leading mergers and acquisitions firm.

Tolman Geffs, managing director at The Jordan Edmiston Group, cited Verisign's $30 million acquisition of Moreover, an aggregator of real-time Web content that helps power the news search for iWon MSN and other sites, as the largest deal to date in the blog industry. Verisign also bought Weblogs.com, a service that can tell when blogs are updated, for $2.3 million.

"The big players see that blogs are a real business," Geffs said. AOL bought into the content side of blogging with its estimated $20 million purchase of Weblogs Inc., a collection of dozens of niche Internet sites.

Next up, according to Geffs: the fragmented ad network space, in which dozens of networks vie to buy inventory on thousands of Web sites. "There will be action there," he said.

The last few months have seen a spate of Web media M&A activity, much of it from News Corp., which paid $580 million for MySpace.com and another $650 million for games site IGN.

Geffs said he expects slower growing media companies to follow the lead of Gannett, which bought rich-media technology firm Point Roll for $100 million in June. Similarly, Scripps bought Shopzilla, a comparison-shopping site, for $525 million, also in June. He added that media companies would continue to make such moves, particularly for firms that make online advertising more efficient as the industry grows to handle more ad spending.

According to Jordan Edmiston, which handled the Moreover and Point Roll transactions, there were 70 Web media deals in the first three quarters of 2005, compared to 61 in the same period a year earlier. The M&A value of those deals was up from $3.3 billion to $8.1 billion.