Bronte Media

Comes from Andrew Shotland on covering Kelsey’s conference and specifically Rodney Rice, founder of Servicemagic:

“It’s nice to see Rodney here. The last time I saw him it was around the year 2000 and he was kicking me out of his office after I and a couple of goons that I worked with at Homestore.com tried to bully him into giving us a huge percentage of his company for the privilege of putting his brand on our site. The goons are now in jail on various SEC violations and Rodney seems to be doing fine.”

p.s. Also from the Kelsey conference, an update on InsiderPages, one of my favorite ‘dead companies doing great‘ (the prime example of this category is Friendster):

“March 07
2.5 million uniques
6 million page views/mnth
550,000 reviews
negative cashflow (to say the least)

October ‘08
5.5 million uniques
13.7 million page views/mnth
1,000,000 reviews
positive cash flow”

Regular readers will know of my obsession with all things Murdoch. Recently he recorded a series of lectures for ABC radio (Australian version of NPR for those American viewers). This week he discusses the future of newspapers.

For media watchers it’s a must listen. Or if you simply like Australian accents, it’s also a must listen.

His view? Delivery methods (print) will be dead and complacency from sucking at the teet of a monopoly for 100 years will be dead but news will only grow larger. If companies don’t focus on the one essential thing: its bond with its readers, it will be dead. But if they do, there is a chance.

“Prisoners of the past versus enthusiasts of the future,” as Murdoch puts it.

My view is a lot more pessimistic: The tide of classifieds has left the world to see the natural business of news is naked and weak.

I stumbled across a fascinating study that examined the choice goalkeepers make when trying to save a penalty. The result? Goalkeepers should stay put but they don’t.

There is actually two choices a goalkeeper faces if he chooses to move: To jump or stay still and then secondly to jump left or right.

The authors propose that this is because “the norm is to jump, norm theory (Kahneman and Miller, 1986) implies that a goal scored yields worse feelings for the goalkeeper following inaction (staying in the center) than following action (jumping), leading to a bias for action.”

What happens though, is that roughly equally the kicker chooses right, center and left but the goalkeeper chooses to jump right or left 94% of the time. As humans we’d rather be wrong with action than wrong without action.

The full study can be downloaded here.

p.s. I decided to setup a slinkset.com, a white-label digg provider, account and focus on Quantitative Sports (a.k.a Moneyball for all sports). I registered the domain, playistics.com, for $7, the account is free and the design is simple and very customizable.

Highly recommend the experience so far so if you want an easy way to setup such a thing, go for it. And if you are interested in the moneyball of sports, please post articles to www.playistics.com

I am an admirer of Mark Cuban, simply because he is not afraid to make decisions. The SEC charge against him wreaks of shuffling chairs on the titanic in a time the agency should be sorting itself out and wondering why it didn’t do more to shine a light brighter and earlier into the financial mess the country finds itself in.

Nonetheless the charge did produce this excellent profile in the WSJ today. Money quote:

“Mr. Cuban credits the older of his two young daughters with persuading him to take a turn on the reality-television show “Dancing With the Stars.” He and his professional partner were eliminated after a poor showing in the samba.”

I have a particular soft-spot for documentaries about Internet entrepreneurs, ignited by the movie startup.com, which charted the amazing rise and fall of govWorks.com. There has also been this small documentary on the beginnings of Yelp that is similarly good.

Now Current.tv has released an excellent 10 min documentary on the Techstars seed funding program and in particular on Foodzie, an Etsy for food, and Ignighter, a group dating site. Go watch it now and be inspired:

From an excellent op-ed in the WSJ about bailing out Automakers:

“If the government diverts our national savings into businesses that have long track records of destroying investment capital, eventually we’ll end up with an economy like France’s — or Zimbabwe’s”

One of the best conferences I went to this year was Leadscon, a show run by Jay Weintraub about the lead generation industry, who in effect are the canaries in the online advertising coal mine.

I just registered for the 2009 conference on March 4-5 and if you register before the end of the month the ticket is a bargain $395.

I don’t get anything from promoting the conference but the satisfaction of helping Jay and perhaps rescuing others who are tired of the mass supermarket shows like SES, AD:Tech and Web 2.0 where the same high level presentations are given and you have no chance of networking with the actual attendees and speakers and are more likely to run into a junior inside sales guy at YAAD (yet-another-ad-network).

For the posts I wrote on this year’s conference, see here and one about the media buying mess caused by the mortgage implosion last year.

See you in Vegas.

Regular readers will know of my admiration of Michael Lewis. He has his piece de resistance on the fall of Wall Street in Portfolio magazine now online. Go read it now. Money quote:

“We have a simple thesis,” Eisman explained. “There is going to be a calamity, and whenever there is a calamity, Merrill is there.” When it came time to bankrupt Orange County with bad advice, Merrill was there. When the internet went bust, Merrill was there. Way back in the 1980s, when the first bond trader was let off his leash and lost hundreds of millions of dollars, Merrill was there to take the hit. That was Eisman’s logic—the logic of Wall Street’s pecking order. Goldman Sachs was the big kid who ran the games in this neighborhood. Merrill Lynch was the little fat kid assigned the least pleasant roles, just happy to be a part of things. The game, as Eisman saw it, was Crack the Whip. He assumed Merrill Lynch had taken its assigned place at the end of the chain.”

Move turned in another ho-hum quarter, where revenues declined by 3%, and investors responded by driving the valuation of the company to its rough cash value.

The company’s main business, selling real estate advertising is doing OK and is in an enviable market leading position but:

- The Welcome Wagon business hangs around like a bad smell and continues to deteriorate: In the third quarter it had an operating loss of over $3m, the company has not found a buyer in nearly a year and it wrote down the carrying value of the business to $0.

- The company had most of its cash in auction rate securities: $129m to be precise. In response it now has a short term loan of $65m secured against the auction rate securities that it has drawn down upon.

At a closing price of $1.37 today, the company is valued at roughly $210m.

Continuing operations are running at roughly break even but Welcome Wagon is burning cash.

The company has $114m in cash plus $121m in auction rate securities (company’s fair value of the $129m of actual securities it holds). If we net out the $65m borrowings, the company has a net cash position of $170m

That leaves roughly $40m left to value the continuing operations, which include the market leading site, with complete coverage of listings and a freshness of updates that no other site can rival.

In essence, the market is saying that MOVE is worth less than Trulia and Zillow. Even though Hitwise says Realtor.com gets roughly five times as many page views as Yahoo Real Estate and Zillow, the number two and three according to their rankings, and twelve times as many as Trulia.

I first wrote about MOVE being a bargain when it was at $2.60 in December of last year, so I have clearly been wrong. The real estate market is not turning around soon and there will be continued pain as a broader recession hits even hard but $40m for the leading real estate site in the US?

Blodget does a fantastic follow up to the initial series of posts he has done on the New York Times.

The company is heading for a brick wall in May of next year. Specifically, even if it didn’t have to pay back roughly $400m in short term debt, then it wouldn’t be profitable anyway. That might not make much difference, but the company has no cash left as it is, so the situation becomes even more tenuous.

Given the Cubs sale is going so badly, then the share of the Red Sox might not fetch much. Forget about the Boston papers getting anything and management seems ignorant as to the fact that they need to cut deep and wide in their editorial department and for the Salzberger family, to eliminate their dividend.

The analysis gives more credence that their only option will be to sell About.com.

Meanwhile, I am sure Murdoch lurks in the shadows licking his chops.