alarm:clock

Advertising - Wednesday, April 16, 2008

Federated Media Sells Minority Stake For $50M

We generally avoid congratulating firms that we post about for raising funding but in this case we raise a pint to our own site representation firm Federated Media which today closed a $50M round of financing led by Oak Investment which got a minority stake.

We met-up today with a publisher who is also rep'd by Federated and who claims to have been their toughest critic. The usual gripes about FM has been about their server speed and how the don't manage remnant or backfill ads. But this publisher remains a stalwart FM supporter because - surprise, surprise - nobody can touch their direct sales payouts.

It's always interesting to see who FM touts as its leading pubs. In its release its leads with Boing Boing, Ars Technica, Ask A Ninja, Digg, Dooce, Confessions of a Pioneer Woman and NOTCOT, as well as social networking applications including Graffiti Wall and Watercooler.

FM is not revealing its valuation but $50M for a minority investment given how much has already been invested suggests that its at $150M or more. FM has said it has been profitable since last year’s third quarter.

So why raise so much funding? Well we understand they plan an office in San Francisco (maybe take over the CNET building?) We might also expect some M&A steps. They could invest or by some of their publishers or they could buy ad serving or management technology. This will be fun to watch.

The deal also reminds us of two other blog moguls - Jason Calacanis and Nick Denton. Calacanis rushed to sell WeblogsInc. for $25M. Calacanis publicly jumped on his rival Denton to sell Gawker Media while there were still buyers. Now it seems that by the valuation of FM, a blog empire that started well after WeblogsInc., that Calacanis may have been too hasty.

View - site