Notable tech IPOs in 2011
IPOs in the pipeline for 2012
Web-domain
IPO
CURRENT PRICE*
2011
Zynga
(DEC. 15)
$10
$8.90
YELP
Filed an S- 1 in
November;
looking to go
public in first
quarter
JAN.
2012
plan launches
Groupon
(NOV. 3)
$20
$17.92
Pandora
(JUNE 14)
$14
$10.70
FACEBOOK
Reportedly
looking to go
public between
April and June
MILLENNIAL
MEDIA
Mobile ad
network filed
an S- 1 on
Jan. 5.
this week—are
you prepared?
What to know as ICANN
opens application process
LinkedIn
(MAY 18)
$45
$64.64
■ BY JASON DEL REY jdelrey@adage.com
Demand Media
(JAN. 25)
$17
$7.43
*Current price as of Jan. 5, 2012. Source: Birinyi Associates
Glam Media will test investors’
appetite for digital-media IPOs
DESPITE HEAVY OPPOSITION from some
members of Congress and the
Association of National Advertisers,
among others, the Internet Corp. for
Assigned Names and Numbers on Jan.
12 will begin accepting applications
from businesses and other groups to
create and operate pieces of internet
infrastructure known as generic top-level domains, or gTLDs. These can
cover everything from .facebook to
.lawyers. Here’s what brands need to
know about the process of buying
one—or protecting their current brand
assets:
Old-school model of huge scale and display advertising draws interest
■ BY COTTON DELO cdelo@adage.com
SOME OF THE hottest web startups of
the past decade are going public, including Groupon, Zynga and, soon,
Facebook. A company whose concept
predates all of them is about to join the
club: Glam Media.
Glam was founded in 2005 by former Apple exec Samir Arora and funded at $130 million by a glittering coterie
of Silicon Valley venture capitalists,
including Tim Draper. Its business
model is as old as advertising itself: Place
big, lush display ads where users will see
them. In this case, that means 2,500
websites—mostly geared toward
women—you’ve probably never heard
of, such as Women’s Forum, SheFinds
and 101 Cookbooks.
Glam was billed as a next-generation
media company back when traditional
media still mattered on the web, before
digital media was subsumed by social,
casual gaming and group buying. But
just because Glam’s model isn’t new
doesn’t mean it doesn’t work, and the
company has completed a bake-off for
banks vying to take it public.
Multiple sources close to Glam said
that its North American business
became profitable in fourth-quarter
2010 and that it will file to go public in
the second quarter of 2012. The company is considering Goldman Sachs or
Morgan Stanley to lead the offering and
Bank of America to underwrite it.
Glam’s offering will also demonstrate Wall Street’s appetite for a true
digital-media IPO. Vertical properties
such as Zillow or WebMD typically
trade at a premium compared with
broad-based portals or ad networks,
according to an equity research analyst
covering digital media. (He asked not to
be identified, as his firm could be looking to get in on the deal.)
Thus, its share price could benefit
from Glam’s being considered a vertical
media company owning the women’s
space. But it “will probably still be
impacted by the perception that it is at
Prepare to pony up
To buy a top-level domain, plan on
spending at least $500,000, including the
initial application fee and technology
costs, according to Alexa Raad, former
CEO of the .org registry and current
CEO of the consultancy Architelos. That
makes it even more important to consider whether you have a real business case
for the new g TLD.
ARORA
“We don’t have any competitors in the
women’s space, not even close,” he said.
least in part an ad network or a content
network,” the analyst said.
Glam CEO Mr. Arora enjoys talking
about how Glam is No. 1 in reach and
revenue among properties targeting
women. “We don’t have any competitors in the women’s space, not even
close,” he said. Glam was the 10th most-trafficked U.S. web property in
November, with 83.9 million unique
visitors, according to ComScore.
Like many startups that set out to
turn long-tail blogs and small websites
into gold mines, Glam got big by signing up publishers, selling their inventory to advertisers and splitting revenue
down the middle. It doesn’t own most of
its content but has publishing rights on
its owned sites: Glam.com, Brash.com
(men) and Bliss.com (health).
The possibility that publishers may
bolt is one risk of “renting” content, and
Glam is trying to become more of an
owner. Last summer, it introduced
GlamCreate, a content management
system that publishers can use. They
don’t pay hosting costs in money but in
intellectual property, giving content
ownership to Glam.
Ownership opens the door to revenue from syndication, although just
200 authors within the Bliss.com vertical are using GlamCreate. Mr. Arora
said the company is developing a
Hollywood-inspired “residuals” model
to compensate writers whose work is
republished.
Glam can operate like an ad network
for display or video campaigns but also
develop custom editorial around a prod-
uct for a higher CPM. It has long
walked the line between selling content
to advertisers and creating thinly veiled
advertorial. “They operate more like a
marketing organization than a media
organization,” said Dave Marsey, senior
VP-media practice lead at Digitas.
Just
because
Glam’s
model
isn’t new
doesn’t
mean it
doesn’t
work,
and
it has
held a
bake-off
for banks
vying to
take it
public.
Be proactive about protection
Register your brand with ICANN’s
trademark clearinghouse. With that
registration, a brand such as .pepsi won’t
have to apply for and purchase the
g TLD version of its name if it doesn’t
want to use it.
Anticipate competition
for your name
In cases where a brand only has trademark rights in a specific industry (say,
Delta Air Lines vs. Delta Faucet), both
parties could make the case for the
gTLD—in this case, .delta. If the two
parties can’t come to a resolution on
their own, the g TLD will be put up for
auction. Jeff Ernst, a principal analyst at
Forrester Research, expects some
g TLDs to fetch more than $1 million at
auction.
Watch the deadlines
Two weeks after the application period
closes, ICANN will publish information
about every application it received.
Starting in May, companies will have
the opportunity to object to any new
g TLDs they feel infringe on their trademarks.
Create a policing strategy
for second-level domains
This is the section of a domain name
before the dot. Trademark holders who
have registered with the clearinghouse
get first crack at purchasing second-level
domains on new g TLDs ( pepsi.soda, for
example). The clearinghouse registration will notify trademark holders if
another party buys a second-level
domain that infringes on the trademark
holder’s legal rights.
