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The principals of M&A are quoted regularly and frequently in publications ranging from Business Week and Forbes to the Wall Street Journal, the New York Times, New York Post, Los Angeles Times, and other major publications worldwide. M&A has been the subject of interviews on business-radio and television programs including the Fox Business News, CBS MarketWatch, The Street.com TV, Yahoo! Finance TV, Sirius XM Radio, BBC-Worldwide and CNBC. Below are links to a sample of articles in which M&A has been quoted:

Online M&A Rush Stays High-Speed

September 2005

Online M&A Rush Stays High-Speed

By RIVA RICHMOND 
DOW JONES NEWSWIRES
September 28, 2005

NEW YORK -- The giants of Internet content have a seemingly insatiable appetite for acquisitions.

Flush with cash, established leaders such as Google Inc. and Yahoo Inc. and aspirants like News Corp. are shopping for niche services. They already have snapped up companies that help people share photos and make phone calls via the Internet. Spending is far outpacing that of previous years, and experts expect more.

Indeed, Microsoft Corp. says it expects to step up its deal making. Time Warner Inc. could too, under pressure to make more of its America Online business, and News Corp. Chairman Rupert Murdoch has vowed to spend heavily to build an Internet portal. They are all banking on online advertising as a key source of future profits.

Spending on Internet-related acquisitions so far this year is almost double the total for all of 2004. New York research firm The 451 Group says buyers signed 178 deals valued at $26.5 billion through Sept. 16, compared with 173 deals valued at $10.1 billion in 2004. The 171 deals of 2003 were valued at just $4.8 billion.

"The survivors, the people who've figured out their business plans, are going out and making acquisitions and consolidating their businesses," says Morton Pierce, a mergers-and-acquisitions lawyer at Dewey Ballantine. "It's part of a natural cycle" of a maturing industry, he adds.

Technology venture capitalist Geoff Yang of Redpoint Ventures says Yahoo, Google and Microsoft's MSN have sealed up top spots, but says contenders such as News Corp., IAC/InteractiveCorp and Time Warner's America Online are jockeying for perhaps two more. Google and Yahoo -- and MSN and AOL to a lesser extent -- mostly have focused on small deals to flesh out offerings and complement aggressive internal-development programs. Meanwhile, News Corp. and IAC have targeted larger properties that can provide quick market share.

Buying the Small Players

This increased M&A activity has also partly been driven by media companies, such as newspapers, looking to the faster growth of online advertising to offset more sluggish newspaper ad revenue. Mostly they have bought niche Web properties that mirror their existing businesses, rather than try to beat paths into the pantheon of Internet giants, although News Corp. is the notable exception. In contrast, Internet companies have bought into niches to broaden their offerings.

"A number of established firms are seeing that the time is right to develop more full-service products by acquiring a number of players who are leaders of small, well-defined niches," says Ken Marlin, founder and managing partner of boutique technology investment bank Marlin & Associates.

For instance, Yahoo and Google both snapped up digital-photo companies. In March, Yahoo bought Canada's Ludicorp Research & Development Ltd., owner of photo-sharing Web site Flickr. Google acquired Picassa Inc., a maker of photo-organizing software, in July 2004. In the Internet-telephony arena, Microsoft bought Teleo Inc. and Yahoo bought Dialpad Communications Inc. And in mobile services, AOL bought Wildseed Ltd. and Google bought Dodgeball.com.

Industry watchers expect more of the same kinds of deals. "Any place where digital content is aggregated, that is where you're going to see the next M&A," says Andrew Schroepfer of The 451 Group.

Mr. Schroepfer expects digital-video companies, such as Internet-television start-up Akimbo Systems, and local-search and -content providers like Interchange Corp. and Craigslist.org, to attract suitors. Paul Inouye, an investment banker at Piper Jaffray, says wireless content will remain a hot area, particularly in gadget-hooked international markets.

"People are trying to build scale because they want to stay relevant, they want to have reach and they want traffic to amortize all the costs on," Mr. Yang says. "As long as you see these stock values high, and you still see some pretty good growth, you'll continue to see acquisitions."

Meanwhile, target companies are stronger, able to command better prices and more willing to sell, Mr. Marlin says. He expects the M&A activity to continue in earnest for three or four years.

Yahoo says loftier valuations means it often chooses internal development over acquisitions, though it will sometimes try to get into a market faster by buying technologies it can build upon. It is more cost effective to go this route because Yahoo's leadership position means it can penetrate niche markets easily, says Toby R. Coppel, Yahoo senior vice president of corporate development.

International markets, however, are different. The race for global market share prompted Yahoo to pony up $1 billion for a 40% stake in Chinese company Alibaba.com Corp. last month. A week later, Google filed to raise about $4 billion through a secondary offering of stock and said some of the proceeds would be used to fund acquisitions, sparking speculation it too would make a big buy in Asia.

Just the Beginning

The size, growth pace and profitability of the Internet industry will continue to attract participants and spur consolidation and innovation, says Mr. Coppel of Yahoo. "We're only at the beginning of all the activity in the industry, whether it's through building or buying or through partnerships," he says. "It's very, very early."

Google didn't make an executive available for comment. Chief Financial Officer George Reyes said at an investor conference last month that Google is focused on small purchases that provide talent and new technology, though the company hasn't ruled out large deals.

MSN's chief financial officer, Bruce Jaffe, says acquisitions will likely accelerate, but internal development and partnerships will also be key to growth plans. Mr. Jaffe declined to comment on reports that Microsoft is considering an investment in AOL that would involve MSN displacing Google as AOL's search provider. MSN's focus areas have been and will continue to be information services, particularly search, and communications, such as email, instant messaging and online community building, he says.

"We actively look at a range of companies to buy -- large and small -- and we look at that as a way to complement our core platforms and our core R&D efforts," Mr. Jaffe says. "You won't see us slowing down, and if anything you'll see us picking up."

Turnaround Strategy

Meanwhile, AOL, which has been struggling with declining Internet-access business, has made a handful of acquisitions to support a turnaround strategy designed to drive advertising revenue. With an eye on Yahoo's success, AOL opened up its portal to the masses and began offering much of its once-exclusive content for free.

"The time is right for AOL to make focused, strategic, targeted plays in key areas that are aligned with our business strategy," says spokesman Nicholas Graham. "As you seek to grow your audience, you need to provide more value, different value."

Meanwhile, News Corp.'s Mr. Murdoch has said he might spend as much as $2 billion to build an Internet portal to compete with those of Yahoo, MSN and AOL. The company has bought Intermix Media Inc., owner of the MySpace social-networking site; online sports company Scout Media Inc.; and Internet videogame company IGN Entertainment Inc. It also plans to buy or partner with a search engine and Internet-telephony companies, Mr. Murdoch says.

"We're going to look to start integrating and operating these businesses, and continue to look at smaller ones," says Ross Levinsohn, president of News Corp.'s new Fox Interactive Media unit. He says discussions are under way with Internet companies or their venture-capital investors.

-- Jonathan Shieber contributed to this article.

Ken Marlin is founder and Managing Partner of Marlin & Associates New York LLC ("M&A"), a specialized investment banking advisory and consulting firm providing transaction advice and services to middle-market firms in the technology, information and business services sectors. The firm is based in New York City and Washington DC. For more on M&A, see www.MarlinAndAssociates.com.

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