Digital Players Spending Big To Grab The Elusive Local Ad Market

Posted: December 3, 2010 in Convergence, Digital Media, Innovation, Uncategorized

The ongoing attempts by everyone in media to figure out how to tap the local advertising market have taken on a new urgency among the major digital players, who are beginning to worry that even newer, more agile, companies are in better position. So they have taken a playbook from more traditional companies and chosen to cut their time to market by acquiring businesses that are already there…even if it might mean overpaying. That means that they are putting an additional value on those companies based on the fact that they see the acquisitions as “defensive” moves to preserve their market positions.

From Seeking Alpha’s Wall Street Breakfast Email (by Rachael Granby):

“Tech firms go local. Amazon (AMZN) and eBay (EBAY) both announced deals yesterday for online local services, as tech firms increasingly view ‘local’ as a lucrative market. Amazon will invest $175M in online coupon company LivingSocial, and eBay purchased, which lets users see if items they’re looking for are available on local store shelves, for an undisclosed price. The moves come amid chatter that Google (GOOG) is working on a deal to buy Groupon, a local coupon site, for as much as $6B.”

From the original story on Reuters:

“It’s local mania,” said BGC Partners analyst Colin Gillis. “People are taking strategic positions in this marketplace. That’s what’s happening.”

From the Daily Beast (David Kirkpatrick):

Buying the discount email company Groupon—for a staggering $5.3 billion, no less—would only reinforce the feeling that Google, the company to beat in tech, is suffering a crisis of confidence.

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