Vine proves more popular dead than alive; tronc and Gannett see their stocks get hammered
Morning Brief: The sale of the Los Angeles Times, Chicago Tribune and other tronc newspapers that has long been predicted by some media reporters now doesn’t appear to be so close, and now investors are heading for the hills
So, what is the lesson to be learned from Twitter’s decision to close down Vine? Don’t sell your company, as the founder who did just that suggests? Or, make sure that when you make an acquisition you come up with a budget and forecast?
I guess both can be true. But in most circumstances the actual goal of the founders of a start-up is to sell-out – it is the time when they get their big reward for the entrepreneurial efforts.
As for due diligence and budgeting in M&A, it appears to be a lost art. In the pursuit of “scale” the idea is that the value of adding a property will be obvious, sometime in the future, maybe.
In the end, websites liked Vine because it gave them content for free. Like those damn cat videos of a few years back, editors could come up a story just by stealing a few vines – it was the ultimate clickbait. In fact, the vast majority of obituaries for Vine are simply collections of vines.
Vine founder says ‘Don’t sell your company’ after Twitter axes service as Pornhub offers to buy it
Twitter’s decision to close its video sharing service Vine has been met with regret from one of the founders just as adult entertainment site Pornhub launched a tongue-in-cheek acquisition bid for the platform.
Vine founder Rus Yusupov, who left his company in 2015, took to Twitter (of course) to express his disappointment in the social media firm’s decision to kill Vine – the product it bought in 2012 for a reported $30 million.
Vine’s dead. Is Twitter next?
When Twitter bought Vine in 2012 for a rumored $30 million, there were already dozens of similar social video apps available from startups. But Vine would have access to something none of these others did: Twitter’s large user base.
Both Twitter and Vine focused on brevity. Both apps also appealed to a combination of creatives, celebrities and brands. And it only seemed natural that Twitter would eventually move from text to images to video.
Dick Costolo, Twitter’s CEO at the time, described Vine as “the next big thing” after acquiring it. Jack Dorsey, Twitter’s current CEO and cofounder who reportedly pushed Twitter to buy Vine, called it one of the company’s “foundational acquisitions” as recently as this April.
By that point, however, the writing was on the wall.
That sale of tronc, formerly Tribune Publishing, to Gannett just doesn’t seem to come, despite the predictions of many media reporters. In fact, the rumors only resulted in the tronc stock being driven up well past its true value. Now a deal doesn’t appear just around the corner the tronc’s stock is taking a serious hit – down nearly 28 percent in the past 24 hours. As for Gannett, which has made a mess of their acquisition efforts, their stock is being hit, too – not because, like tronc, there was a run-up in the shares, but just as a way of investors telling the company “you guys are nuts.”
Tronc and Gannett shares plunge amid merger doubts
A collapse of the deal would undermine Gannett’s strategy to fight the decline in newspaper circulation by assembling a nationwide network for advertisers and saving money through consolidation and operational efficiencies.
Gannett has been formally pursuing Tronc since April, when it publicly launched a takeover bid at $12.25 a share. That was rejected as inadequate by the Tronc board, led by Chairman Michael W. Ferro Jr.
Gannett executives declined to address the Tronc merger specifically during their conference call with securities analysts following the earnings release. Gannett CEO Robert Dickey said, however, that in principle the company sought mergers that would be “accretive for our shareholders and add value,” on financing terms that “make sense for the company.”
“We’re not going to add properties for the sake of adding properties,” he said.
Gannett-Tronc Deal in Doubt as Banks Pull Financing
Banks financing Gannett Co.’s potential takeover of Tronc Inc. have backed out, according to people familiar with the matter, putting a merger of the newspaper companies in doubt…
…“It appears that the banks are the only rational players in this dance,” said Paul Sweeney, an analyst at Bloomberg Intelligence.
An open letter to #RaiseTheSun
Justin Dearborn, CEO of our corporate parent, tronc, announced in May that he was handing out raises to newsroom employees throughout the company to reward them for the quality journalism they produce. The work, he noted, was worthy of Pulitzer recognition, and merited pay increases — but only to non-union journalists. The company said we’d need to negotiate the raises that were given unconditionally at other newspapers in our chain (most of which are not unionized) and even to our managers at the Sun.
After we asked for our own share, the company made us an offer that would require deep concessions — ones that would do away with salary standards we have spent years fighting for and that would penalize the most junior and lowest-paid members of our staff. Even if we made those concessions, the raises wouldn’t go to everyone in the union. Even if we made those concessions, the company would refuse to extend the raises to our union colleagues outside the newsroom, in the Sun’s advertising department and at its printing facility.
I don’t see the new ‘Touch Bar’ seen on new MacBook Pro models as terribly innovative, but I guess others do.
What the Touch Bar says about Apple’s approach to innovation)
It’s hard to imagine anyone other than Apple successfully pulling off an ambitious innovation like the Touch Bar because it requires simultaneous investments on both the hardware and software sides of the business.
Apple’s ability to make dramatic changes to its platforms has been an important source of strength for the company. And it’s a big reason that two of Apple’s chief competitors — Google and Microsoft — have increasingly aped Apple’s business model in recent years…
…Apple is in a better position, not just because people are already willing to pay a significant premium for Apple products but also because Apple’s ownership of the entire Mac platform allows the company to recoup more of the benefits from bets that work.
Apple has one final advantage: Because it controls 100 percent of Mac sales, it can give software makers confidence that a new feature is going to be widely adopted across the platform. Apple initially introduced the Touch Bar only on high-end MacBook Pros. But presumably over the next few years the company will add it to other laptops, as the company has done with other new features like the iSight camera and multi-touch trackpad.