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November 12, 2012

Service Provider Buys Ziff Davis

By Gary Kim, Contributing Editor

j2 Global (News - Alert), a provider of business cloud services, has acquired Ziff Davis, Inc., a leading media company in the technology market. The acquisition includes PCMag.com, ComputerShopper, ExtremeTech, Toolbox.com and Geek.com.

The purchase price was approximately $167 million.

At least historically, the transaction represents an odd scenario. Traditionally, publishers assemble markets, and then advertisers try to reach those assembled audiences. In this case, we have advertisers taking direct financial control of the media it can use as messaging vehicles.

Without making too much of the development, the transaction will traditionally raise questions about whether the new owner could be trusted to ensure the integrity of its media properties, particularly media that routinely evaluates, reviews and talks about technology products that the owner sells.

In our messy new Internet world, where the lines between traditional media and “new media” cross, including content sources directly published by all sorts of private entities, investment houses and others, the historic lines between “media” and “brands” has become quite porous.

J2 historically has purchased about $50 million in advertising, so there is some logic to “paying for the purchase” out of shifted ad budgets.

But J2 also sells advertising on its eFax Free service, and also sells marketing and advertising services through Campaigner.

The company sells Internet fax, virtual phone, hosted e-mail, e-mail marketing, online backup, unified communications and customer relationship management solutions in 49 countries.

Some of us are not aware of a similar transaction having occurred before. It is true that Google (News - Alert), which says it is a software company, sells ads. But Google says it only indexes information, and is not a content creator or packager. It’s a fine line, if you look at the channels Google’s YouTube (News - Alert) unit has created.

Yahoo! and AOL are more traditional publishers. These days, most brands produce some amount of content. Sometimes that content is of general industry or consumer interest. Rarely does a brand become a full-blown media provider, though.

And some of us might say we cannot remember a case where a unified communications, VoIP services, hosted backup and other related services become a full-scale publisher.




Edited by Brooke Neuman
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