NBC Universal has bought women’s portal iVillage for $600 million. Paul Kedrosky thinks it’s an unqualified good deal – “if [NBC Universal] can meet its stated goal of using iVillage to drive $200mm in digital revenue (67% more than iVillage’s current revenues) by the end of 2006.” But can it? 2005 revenue was $91.1 million vs. 2004 revenue of $66.9 million; 2005 Q4 revenue was $30.1 million vs. 2004 Q4 revenue of $18.2 million. That’s a pretty good ramp-up. But this ramp-up looks like it’s entirely due to more aggressive monetization – traffic for iVillage is flat. Here’s some Comscore unique visitor numbers, swiped from iVillage’s press releases:
Aug 2005 — 14.3 M
June 2005 — 14.2 M
Feb 2005 — 16.6 M
Nov 2004 — 16.9 M
Aug 2004 — 15.4 M
May 2004 — over 17 M
Dec 2003 — nearly 15 M
Sept 2003 — more than 14M
In order to continue to grow, iVillage is going to have to further monetize the site – if there’s room to do so after what looks like a year’s worth of optimization – or figure out how to snap the traffic trend and start growing their uniques again. Those are two pretty big ifs for a well-established company. Sure, iVillage will add to NBC Universal’s revenue, but it just doesn’t look poised for the type of breakout that’ll deliver optimal value for money. Much better to find a site that’s still growing in traffic and hasn’t been effectively monetized yet – preferably a site a lot stickier than iVillage, whose visitors stop by a wince-worthy average of ‘more than 2 times per month.’
Rupert Murdoch continues to look like a genius…
CLARIFICATION: that $200 million in revenue is to come from all of NBC Universal’s online properties, not just iVillage.
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Glad you covered the acquisition, and I couldn’t agree more with your ending statement about the News Corp founder. Do you think this is NBC’s equivalent to Murdoch’s IGN acquisition? NBC has so much content and so many incredible brands. It would have been great to see them buy something that could advance the world of digital distribution.
You nail it, Greg. Murdoch was either very lucky or is a genius. iVillage, on the other hand, seems like the most clueless acquisition by any offline (read: not too smart) media group so far. It’s so bad it even makes the NY Times’ acquisition of About.com look smart, by comparison. At least, About.com was on Movable Type and had thus figured out a way to drive more traffic to their (terrible) website.