MTV in talks with Ziff Davis to acquire 1up.com and GameVideos.com

[Fran]

http://biz.gamedaily.com/industry/feature/?id=14927

At the end of December, the always interesting PaidContent.org revealed that media company Ziff Davis has been looking to sell off two of its divisions. Ever since then, speculation has been running rampant. The rumor mill churned even faster when just recently a prominent Dell logo and tab were seen on the 1UP website, prompting many to consider the possibility that 1UP had been acquired by the PC maker. As it turns out, that is likely just a sponsorship deal for the site.
GameDaily BIZ has learned from a highly-placed source that Ziff Davis Media is in negotiations with Viacom's MTV Networks, and may have been since late 2006. According to the source, MTV would acquire the popular consumer site 1UP.com and, we assume, the up-and-coming GameVideos.com, an offshoot of 1UP that competes directly with MTV's own GameTrailers.com. The fate of the Ziff Davis Game Group and its print publications (such as EGM, Games for Windows, etc.) is currently unclear, as our source has no additional information to share.

Nevertheless, it's clear that the print business is not in the best of shape. The Game Group's revenues in its third quarter ended September 30 were essentially flat year-over-year, and the only reason revenues didn't in fact decline was the strength of online. "Lower print advertising and circulation revenues for the Group's three print magazines were mostly offset by a nearly a four-fold increase in the Group's online revenues," Ziff explained in its earnings release. Even with the strength of online, Ziff as a whole saw its cash and cash equivalents drop by $5.4 million through September.

As for MTV, the company has clearly been growing its presence in the video game space over the last year or so. It started back in June 2005 when MTV started up its own MTV Games label and formed a partnership with publisher Midway. Near the end of 2005, the company snatched up the aforementioned GameTrailers.com. This past August MTV boosted its position in the casual gaming market with the acquisition of Atom Entertainment, which operates the popular Shockwave.com and AddictingGames.com sites. Then, in September, MTV struck again, purchasing Guitar Hero developer Harmonix for $175 million.

That's a lot of activity within the span of 18 months. If MTV completes its transaction with Ziff to acquire 1UP, it will gain a solid editorial voice to complement its GameTrailers team and its own game coverage on MTV.com. Furthermore, assuming GameVideos.com is part of the package, then the competing video sites can combine forces to enhance their product.

We'll keep you posted on any new developments, but we know full well from our own negotiations prior to our AOL deal that these sorts of things can take quite a while to be finalized. Stay tuned.

Since this is MTV, this could be good, but it might be bad for the sites.

 

[Avalanche]

I can never view anything properly on 1UP. The site doesn't like my computer.

 

[Fran]

Well, they bought Harmonix as well, and that just gives Guitar Hero a greater audience. So I guess this will be alright.