Photo courtesy of Pritchett Cartoons

Outsider investors are looking in on the media business, trying to understand what is really going on there. The truth is that the content business is not so different than the venture capitals business.

Venture capitals business is based on the idea that the investors are putting there money in more than 10 companies. Hopefully one of them would become a great success, two more will be quite well and all the rest… so-so. In media - it’s not that far off. Media owners invest in about 10 different content pieces – movies, TV series, internet series and more. Hopefully one will become a major hit, two will do quite well and all the rest so-so.

In our area, the creators of the content don’t really need the facilities of the large production houses (like record labels, major studios, TV networks) in order to produce a hit. There is only need for money. Venture capitals might find themselves in the near future investing in content – the multiples are not so different than in hi-tech. The investments needed are in the same scope and the real advantage is that you know very quickly if you have a hit or not.

K.

Photo courtesy of Black College Wire

Will Yahoo buy Facebook in a one billion dollar deal? This is the question that had been raised last week in the economical newspapers.

In the last year we haven’t heard any real news from Yahoo. It seemed as if the number one portal had lost not only its revenues (the company announced on it last week) but also momentum.

Facebook is the growing one. 71% of college students said on July that Facebook is in. The same amount also said that drinking beer is in.

Facebook is a walled garden. The entrance allowed only to college students. MySpace, the largest community website, is an open portal. Everybody can open a page, more than 1B page views per day!!! – Really a monster. Facebook leveraging is in his walled garden. The users feel safe (no perverts, no commercial pages and virtual friends) and exclusive – meaning not everybody can join this club.

What would happen if Yahoo would buy Facebook?

One option – nothing. They will leave Facebook as a property just like they did with Flickr. No real connection to Yahoo.

The other option – Yahoo will make Facebook turn into the community site of Yahoo offering all Yahoo’s registered users the option to build their page on Facebook. The results – no more safety, no more exclusivity. And the real question is MySpace.

During this time, MySpace is aggregating more and more content from it’s parent company (Fox) and becoming the portal. My bet: until Yahoo will end the circle of buying Facebook and connecting it to there product, it won’t be relevant. MySpace will conquer them all.

K.