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Hi-Media Group acquiring Fotolog for $90 million
The French internet media company Hi-Media Group, has announced an agreement to acquire New York-based photosharing site Fotolog, Inc. for a combination of cash and stock valued at approximately $90 million. (Fox Interactive recently paid a reported $250 million to acquire Photobucket). Launched in May 2002, Fotolog is at its heart a social networking site with more than 10 million members and 15 million unique monthly visitors. Fotolog now ranks 20th on the Alexa list of the world’s most-trafficked websites. The site provides a platform for members to communicate via daily photo postings, or “photologs.” Fotolog is considered to have a truly global membership with strong market position in Latin America and Europe, accounting for nearly 1/3 of its monthly traffic.
Cyril Zimmermann, CEO of Hi-Media, stated: “Hi-Media was attracted by Fotolog, which has only just begun converting its strong audience growth into revenues. We think that social networks are one of the pillars of what the Internet is and will be important in the years ahead, especially when underpinned by simple mechanisms. We are also convinced that Hi-Media can benefit substantially from Fotolog’s efforts to generate maximum revenues from its audience thanks to the advertising and micro-payment services that Hi-Media has developed over the past decade. In addition, we believe that the expertise and experience of the Fotolog teams who are joining us will allow us to reinforce and accelerate the development of our publishing division.”
Hi-Media is expecting the acquisition to create certain synergies with its extensive ad network by working to further monetize the Fotolog audience. The press release states “Fotolog began to monetize its audience in 2007 and expects that revenues in fiscal year 2007 will reach $2.3 million. While Fotolog has sustained losses since January 2007, its revenue has recently increased sharply (sales have increased by approximately 245% since January 2007), and management anticipates Fotolog will reach break-even within the six months following the acquisition, resulting in a positive contribution to the operating income of Hi-Media in 2008”.
John Borthwick, Fotolog Chief Executive Officer, stated, “We found the ideal partner in Hi-Media Group to build on our strong momentum and monetize our fast-growing audience. This will be one of the biggest publicly-traded Internet pure plays in Europe, bringing together Hi-Media’s leading ad network and Fotolog’s large and highly-engaged user base. Hi-Media is committed to investing in Fotolog’s compelling member experience and growing the platform we have created.”
Web: www.hi-media.com - www.fotolog.com - Click here to view the original press release.
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