Yahoo/Right Media: It seems to me like a lot of money to pay for a very young company that passes 90% of its revenue onto to its publishers and seemingly low barriers to entry. $680m for 80% indicates a total value of $850m, which is larger than 24/7 Real Media's total enterprise value of $478m. While TFSM does not directly compete in the advertising exchange model, it a profitable public company with a global platform in the media network, technology ad serving, and search engine marketing space and it is expected to do $270m in revs in '07. While Right Media has the first mover advantage, I find it hard to understand how they have a sustainable competitive advantage over companies like TFSM and DCLK that can leverage their ad serving technology and media networks to successfully enter the ad exchange space. Perhaps that is why RM sold out.
That Cool New Movies-On-Demand Box--VUDU: Does the world really need another set-top box? I think Vudu needs distribution. TIVO is best positioned with its Comcast and Cox partnerships. Give it another 6-12 months and the spotlight will shift back to TIVO as the industry leader. VUDU needs one of the major set-top box manufacturers to buys it or it must make deals with the MSOs for distribution. Otherwise it isn't that interesting.
Amazon S3: In this blog post, SmugMug lays out the details of how much money his company has saved by switching to Amazon's S3, the new web-services service that Wall Street is all hot-and-bothered about. On the call, Bezos said the service's contribution to Amazon's performance was immaterial. Based on SmugMug's post, moreover, it seems like a very low-margin business. So, is this really a good business for AMZN? AMZN is selling $423k of services for $84k? I am sure AMZN has some scale advantage but it seems like this is likely another low margin business. If I was Smugmug, I would be concerned that AMZN would raise prices after standardizing on their platform.