Online marketing and media services continue to be the major catalyst of M&A market activity, tallying $32 billion in transactions, or 42% of the overall value of media industry mergers during the first half.
Major online deals announced during the half included Microsoft's acquisition of aQuantive ($5.7 billion), Google's acquisition of DoubleClick ($3.1 billion), and WPP's acquisition of 24/7 Real Media ($649 million).
In all, the top 10 online media and marketing services transactions in the first half of 2007 totaled over $24 billion, accounting for 77% of total deal value for the sector.
The report attributed the surge in online media M&As to the "extraordinary growth" in online advertising, especially the jump in online video advertising sales, which is projected to grow more than 60% through 2010 to nearly $3 billion from less than $1 billion this year, according to figures from eMarketer.
"The story behind the story is the pressing need for greater efficiency of digital advertising delivery," reads the report. "There is a tremendous demand for nuts and bolts companies that improve the deployment, performance, and cost effectiveness of online advertising. This in turn drives M&A, as larger companies assemble end-to-end digital ad management solutions by acquiring smaller outfits, much as DoubleClick and aQuantive had done before being acquired by Google and Microsoft, respectively."
Media M&A Deals: First Half ’07 Vs. First Half ’06 (In Millions) | ||||||
| First Half ‘07 | First Half ‘06 | Change | |||
B-to-B Magazines | Deals | Value | Deals | Value | Deals | Value |
Consumer Books | 24 | $2,334 | 21 | $2,075 | +14.3% | +12.5% |
Consumer Magazines | 5 | $324 | 5 | $1,062 | NC | -69.5% |
Database Services | 32 | $2,719 | 27 | $803 | +18.5% | +238.9% |
Directories/Reference | 14 | $20,173 | 23 | $1,122 | -39.1% | -- |
Education/Professional | 6 | $885 | 12 | $6,490 | -50% | -86.4% |
Exhibitions/Conferences | 16 | $10,119 | 9 | $317 | +77.8% | -- |
Marketing/Interactive | 38 | $515 | 26 | $16,531 | +61.6% | +66.6% |
Newsletter Publishing | 4 | $139 | 12 | $96 | -66.7% | +44.8% |
Newspaper Publishing | 22 | $6,941 | 46 | $9,492 | -52.2% | -26.9% |
Online Media | 120 | $4,213 | 101 | $4,021 | +18.8% | +4.8% |
Total | 399 | $75,907 | 355 | $42,649 | +12.4% | +78.0% |