Over the years, News Corp. has been acquiring businesses that would help it close the gaps in its portfolio. The MySpace acquisition helped it to leapfrog in the social networking space and with the recent acquisition of Dow Jones it will emerge as a leading player in the financial news and information space. The Company will, most likely, continue to pursue strategic acquisitions in the segments where it is weak or has a very small presence and with the help of some big-ticket acquisitions it would redress.
While talking about acquisitions in the online space, the first thing that comes to my mind is Monster, the leading job search engine. Monster has been struggling of late and has lost its leadership position in the US to CareerBuilder. The stock has fallen to $34.20 from its 52-week high of $54.79. The online job industry is getting very competitive for stand-alone companies and this plays well into the hands of News Corp. who doesn’t have a presence in the space and would be more than happy to create one at a good valuation.
In the Real Estate space, News Corp. could consider acquiring Trulia, ZipRealty or Zillow. Trulia recently raised $10 million in Series C funding led by Sequoia Capital. The site has raised $17.7M in total VC funding since 2004. ZipRealty was ranked 9th in the HitWise survey of Top Real Estate sites in the US in February 2007. ZipRealty is traded on the NASDAQ and has a market cap of $160 million. Zillow has raised $57 million in funding till date. According to Hitwise data, Zillow is ranked 7th among the top 10 real estate sites in the US.
In the Health space the Company might consider acquiring Healthline, a medical search engine, which has been growing rapidly (269% growth in 1Q 2007 over 1Q 2006). In July 2007, Healthline raised $21 million in Series B financing led by GE/NBC Universal’s Peacock Equity Fund, and included Aetna Ventures, LLC, Kaiser Permanente Ventures, U.S. News & World Report and previous investors VantagePoint Venture Partners and Reed Elsevier Ventures. It had raised $14 million in Series A funding in January 2006. It could also consider acquiring social networking sites like, DailyStrength or PatientsLikeMe. And if it gets truly ambitious, and decides to write a very large check, WebMD is also a possibility.
Online Travel is one of the largest Web 3.0 categories and is growing at a rapid pace. It surprises me to see that Murdoch and his boys have not made acquisitions in this category yet but I have feeling that we will soon see some activity from the group in this space as it is too tempting to resist a market that is $78.8 billion and growing. I would not be surprised if it decides to acquire Expedia, Priceline, or Orbitz. The Company could even consider buying TripAdvisor from Expedia, as the later has been mulling a spinoff of TripAdvisor. TripAdvisor will cost News Corp. anything between $1.0 billion to $1.5 billion. TripAdvisor currently accounts for 6.7% of Expedia’s revenues. [For the record, I think its a very bad idea for Expedia to sell TripAdvisor, but if they do so anyway, then I don’t see why Murdoch’s boys should not buy.]
News Corp. could look at acquiring companies in the online auto space, as this is an emerging segment. Some targets companies that News Corp. could acquire are CarGurus, an online auto community site or Autobytel Inc., which operates MyRide.com and Autobytel.com.
News Corp. had shown interest in iVillage and I am sure they are checking the Online Women space and would be more than happy to acquire a women’s site and fill a gaping hole in its portfolio. But why would NBC sell iVillage? Nah, they won’t. BellaOnline, the 2nd largest women’s website on the Internet with over 20 million pageviews a month is an obvious target. PopSugar, which has raised $5 million in VC funding from Sequoia Capital and HerFabLife, is a social book marking community for young and trendy women are two interesting target for the Company. The other target is the somewhat controversial Glam Media, which claims to be bigger than iVilage, but in realty, isn’t.