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Missives from a media business geek

Warner signs 7digital MP3 deal in Europe

Reuters are reporting that Warner Music has signed a deal with digital media site 7digital.com to provide its catalogue in the MP3 format, which can be played on nearly all music devices.

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, a division of Warner Music Group said its catalogue — with hits from James Blunt and the Red Hot Chili Peppers — would be available to .com customers in the UK, Ireland, Spain, France and Germany. The site is the first major European download store to offer Warner’s tracks in the DRM-free MP3 format — offers EMI’s catalogue in the MP3 format and aims to sign more labels soon.

Founded in 2003, 7 Digital’s singles service distributes singles to over 200 partner sites such as , , , and . 7 Digital is established in the music industry by providing the download capability for all the major record labels and over 200 independents. In addition, 7 Digital helps artists such as Gorillaz and Coldplay make downloads available directly from their own websites.

Investors: ,

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Yahoo Execs shame?

Apparently  have changed their company severance policy in order to protect employees in the event that a takeover bid is successful. They have extended the pay protection for full time employees to between four months to twenty four months of base pay. The benefits take effect if an employee’s contract is terminated without cause by — or another acquirer — or if the employee leaves with good reason within two years of a change of ownership.  My first impression is that it is a sensible move that should slow any exodus of key employees and ease the pain of severance should it come. However apparently the twenty four months will be offered to CEO Jerry Yang, Chief Financial Officer Blake Jorgensen, and certain other executives still employed by the company and named in the SEC proxy filing for ’s 2007 annual general meeting. That list includes former CFO Susan Decker, now president of the company. If true then they should hang their heads in shame. Shouldn’t the lower paid employees be paid the 24 months and the executives 4 months?

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Yahoo Letter to Stockholders and 50cents

Jerry Yang and the Board have issued a letter to stockholders explaining their rejection of the offer. The missive puts a positive spin on the strengths of the embattled portal and search operator. However it appears to miss two key points:

  1. There is no such thing as a sockholder that cannot be bought with 50cents.
  2. Perception is reality and ! are perceived as dead if they stay on their current strategy.

Dear Stockholders,

On February 1, 2008, made an unsolicited proposal to acquire your company. As much has been reported in the press recently, I wanted to reach out to you personally to let you know why your Board of Directors, after a careful review by !’s management along with our financial and legal advisors, believes that ’s proposal substantially undervalues ! and is not in the best interests of our stockholders.

Most importantly, I want you to know that your Board is continuously evaluating all of !’s strategic options in the context of the rapidly evolving industry environment, and we remain committed to pursuing initiatives that maximize value for all our stockholders.

We have a unique combination of strengths

! is one of the most recognizable and admired brands in the world. We have over 500 million users (nearly 1 out of every 2 internet users worldwide). In the U.S., we are # 1 in many of the most used online services including personalized home pages, mail, news, music, shopping and travel. Because we have leadership positions in so many indispensable online services, users spend more time on ! sites than anywhere else online.

! is an attractive partner for marketers. ! is #1 in online display advertising, which represents 90% of the advertising inventory on the web, and we are also a leader in search marketing and a pioneer in the growing fields of mobile advertising and online video advertising. Through !, advertisers can now [Read more]

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ZYB Launches Social Phonebook

Danish start-up ZYB has launched a free service, which it claimed not only backs up your phone over the air, but also makes it dynamic by tying it in with on-line social networking services such as LinkedIn, Plaxo and FaceBook.

zyb.pngIn a very simple manner, seamlessly supported by more than 400 phones, uploads your mobile phone’s address book and calendar to your online account within minutes after you sign up to the service. As a result, you get online access to your phone’s content from anywhere, and transferring the phone’s content to a new phone in the future is easily done over-the-air from .com. In a pioneering way, the new also links your phone’s address book to an online community that is constantly connected to your mobile phone, so any updates made by your friends, are automatically updated in your mobile phone. As such, is the “missing link” between the mobile phone and online social networking, opening up a whole new dimension of social networking, where your online personal network is created from your existing contacts in your phone. According to the leading social networking news site, Mashable, this is “the most appealing part” of the new version of .

“We believe that your personal network is not something you create; it’s something you already have. Next generation social networks need to evolve around people’s real-life contacts and be “life-capturing” to reflect people’s real-life behavior and relations. The mobile phone has been used for a decade now as a life-capturing device, keeping a record of who you meet and talk to in the real world. Connecting the online social network with the phone’s address book, is the most effective way of moving social networks closer to real life,” said Tommy Ahlers, CEO and co-founder of .

“There are still a lot of people out there who don’t see the point in building their social network online when they already have a social network in real life. With they can now leverage the power of social networking without building an online presence from scratch,” adds Tommy Ahlers.

With the new version of , users can now:

• Connect to people in their mobile phone’s address book
• Let friends keep their own contact information updated on the user’s phone
• Micro-blog online or from the phone and broadcast the blog to friends
• Upload pictures from the mobile phone and tag them using the phone’s address book
• Expand their social network by searching for people with mutual friends can currently sync a Social Phonebook account with entries on a range of business and consumer networking services. It said that it will soon add the ability to sync with Outlook, Calendar and Calendar as well.

investors include Morten Lund and .

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Yahoo Says No - Arguing On Value Only

 The Board has formally rejected the bid, arguing that it ’substantially undervalues !’, but leaving the door open for an improved offer.

SUNNYVALE, Calif., Feb 11, 2008 (BUSINESS WIRE) — ! Inc. (Nasdaq:YHOO), a leading global Internet company, today said the ! Board of Directors has carefully reviewed ’s unsolicited proposal with !’s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of ! and our stockholders.

After careful evaluation, the Board believes that ’s proposal substantially undervalues ! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.

Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to !. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to !, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of !.

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