Every day I read stuff that convinces me people in advertising and media are really, really stupid. Today’s news that NBC Universal is buying the Web site iVillage for $600 million goes to prove it. Why? Because the well touted reasoning behind the expenditure of all that money is that they will… “Open the women-centric village to the world at large!” NBC Universal plans to “use a base that’s well-known for women as a way to start creating new, vibrant communities that go beyond women,” Hallo… What kind of convoluted reasoning is that? IVillage currently has 14 million users, the vast majority of whom are women. Isn’t it a little like saying I bought the French newspaper Le Monde so I could do a Mandarin edition in Stockholm… Oh and eventually we’ll stop doing the French edition in France. When old media buys new media the only people who benefit are the owners of the new media who cash out big time! NBC is buying iVillage for $600 million, which was the market cap when it went public in 1999. At its peak in 1999, iVillage had a market cap of $2.6 billion; at the bottom, iVillage was worth less than $15 million. By the time NBC gets through with it, it will be worthless!
That works out at $2 million an incredible thing!
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» iVillage Acquisition Valuation: What's the deal? from MidMarketMaven
George suggests that the $600 acquisition of iVilliage may be "stupid." Perhaps, but is it too rich? What does the deal mean for entrepreneurs and executives? [Read More]
Tracked on: March 8, 2006 8:18 PM | Permalink to Trackback