A Day of Acquisitions

Well, today is a busy one in both PR and PR measurement. Intelliseek has been acquired by BuzzMetrics which is now part of VNU (okay, so if I get this right, BuzzMetrics acquired Intelliseek and then was acquired by VNU ... I think) and will be known as Nielsen BuzzMetrics. Yep, that's a mouthful. The full press release is here, and everyone's favorite blog measurement Website, Blogpulse, will still be around as will everyone's new dad of twins, Pete Blackshaw. Crappy timing, though, since VNU announced that they were up for sale to be split up.

Okay, so the quick analysis of this: no brainer that the measurement industry is going to contract and we were going to see either companies go through M&A or just die. It's the same with the Web 2.0 companies, and while I use BlogPulse, I have not used BuzzMetrics nor know much about them beyond the emails I get from Max Kalehoff and his columns in MediaPost. But, while word of mouth marketing is hot right now - and the WOMMA conference should be fun - let's boil it down to what it really means: Nielsen wanted the capability to track this crap so they bought a company to do it - well, actually two companies.

Another interesting piece of news is that BusinessWire is being bought by Warren Buffett. From O'Dwyer's ...

Berkshire Hathaway, the $75 billion conglomerate run by Warren Buffett, has moved to acquire Business Wire in a deal expected to close in the first quarter of '06.

BW's management team, led by newly promoted CEO Cathy Tamraz, will remain in place and operations will not be affected by the ownership change, according to BH. BW will operate as a wholly owned subsidiary of the conglomerate.

Business Wire sent a letter to BH last year pitching the potential acquisition.

Buffett had high praise for the 44-year-old newswire. "In making this acquisition of Business Wire, we have followed our blueprint of buying profitable companies that are industry leaders, yet have significant growth potential," he said in a statement. Buffett cited the company's experienced management team and called it a "gem of a company." He added: "I expect BW to continue to do what it has always done and I'll be there if I can help it in any way."

BW, which is privately held, said it posted double-digit growth in 2005. It has grown significantly overseas in the last few years.

Last month, founder and CEO Lorry Lokey promoted Tamraz, a 26-year-veteran of the company, to the top executive post and said he would focus on his philanthropic pursuits, which have totaled $160M to date.

Lokey said BH is "committed to providing a supportive environment" that will allow the newswire to continue overseas expansion and pursue "emerging opportunities."

BH companies include Benjamin Moore & Co., Fruit of the Loom, Buffalo (N.Y.) News, and GEICO Auto Insurance, among a roster of 42 companies.
This is interesting, and I have been working on a larger piece about the Wire services and whether or not they are needed nowadays (hey, how about those layoffs at PR Newswire). But, hey, congratulations to Lorry as he is a nice guy and philanthropic. I will have more to say about this later in the week, after I meet the CEO of Primezone. But, the telling part here is that BW actively pitched BH to be acquired. There's got to be a story there, but I will leave that to the reporters.

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9 comments

  1. wow, this is really interesting, especially the brandpulse/buzzmetrics purchase.

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  2. FYI, Jeremy, Neville and I just interviewed Intelliseek's Pete Blackshaw about the merger; it's up on the For Immediate Release site (www.forimmediaterelease.biz).

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  3. Add to this folks like Stowe Boyd leaving Corante to do his own thing and Steve Decker leaving Dell to join a WOM agency and we have a lot of activity in our favorite space. Smells familiar?

    But if Warren's buying Bizwire, there's a damn good reason.

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  4. I'm looking forward to your larger piece on wire services...I've been having the same thoughts lately.

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  5. Yep, John, it's odd times a foot.

    Thanks Shel - will listen to the podcast.

    Look for the wire piece this week, Scott.

    And, not sure what it really means Kevin - it's just a burning hot field, but what burns hot also flames out fast. There is too much that can be unethical and sleazy in WOM.

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  6. Buffett buys companies but he also invests in industries that he sees as undervalued. He obviously sees something that none of the rest of us do in the wire services business. As for the PRN layoffs, it's actually a very good thing for the company. The individuals that they layed off (all good friends) were tenured salespeople making big salaries and not producing much in terms of revenue. To restructure an old-school sales structure in the midst of a highly profitable year is bold and agressive. Senior Management isn't needed in a sales org these days and those are the only positions they eliminated.

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  7. Dee, I agree on Warren - he's no dummy. But, the PRN thing - why was the West Coast hit the hardest?

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  8. It really wasn't...it was pretty balanced. They had/have 22 Bureaus and all of the Bureau Managers were let go, as well as the Regional VPs across the board. They're building a much more shallow, horizontal account force. With average tenures of 10+ years and average whopper salaries, they really created a lot of dollars to spend against product development, more centralized client services, etc.
    That's my take on it. As a preferred vendor to them, it makes my job quite a bit easier. I'm dealing directly with Account Managers that are on the street with the clients, rather than a lot of management.

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  9. The profit margins at a company like Business Wire must be absolutely enormous -- what are their costs, except for staffing? -- and it is a shame really that they were not happy about being able to both a.) pay their people well and b.) make huge profits at the same time. People just get greedy -- even philanthropists. Or is his company run by his daughter or something?

    To me it's hard to see where Buffet sees BusinessWire going, now that you can pay PRWeb.com and others $30 to get your message on Google News and etc. Unless he plans to consolidate a bunch of these companies. Or perhaps he forsees a huge growth in the number of people who have information or opinions that they want to put out on the web, but then again, there's the $30 PRWeb.com option.

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