DealBook is linking to blogs,
which is a good thing. But someone at the NYT should probably be reading them
more critically, I think. The NYT’s headline is now "UPDATE: Is NBC Stealing
iVillage at $600 Million?", based on a very
sketchy analysis by Paul Kedrosky:
GE’S NBC unit isn’t paying anything like a MySpace-style premium for women’s
destination site iVillage. Picking the company up for $600-million works out
to 5-times annualized fourth-quarter sales, or 17-times annualized fourth-quarter
income.
What Kedrosky fails to note (but Marketwatch is very
clear about) is that iVillage had a very exceptional fourth quarter, with
"a nearly fourfold increase in net income on a 65% jump in fourth-quarter
revenue." I’m sure that NBC thinks those figures are sustainable –
indeed, that they’ll continue to grow. But Kedrosky’s conclusion that NBC is
getting some kind of a bargain, compared to MySpace, is pushing things. After
all, iVillage has nothing like the buzz and the momentum that MySpace has: it’s
basically an old-fashioned media play selling ads against self-published content,
as opposed to a leveraged internet play like MySpace where the users provide
the content and the website gets all the ad revenue. Comparing iVillage multiples
to MySpace multiples and concluding it’s cheap is like comparing New York Times
Company multiples to Google multiples and concluding the same thing.