Chuck Richard is VP-lead analyst at media research company Outsell Inc.
Media Business: What do you think the level of media M&A activity will be for the remainder of the year?
Chuck Richard: We're in an upswing, and I particularly describe the period we're in as a period of “precision M&A.” In the past, you could argue that there was portfolio-building or financial M&A, where you just decided based on some earnings numbers and some revenue trends, and that was good enough. Now, buyers are being very selective and following very well-defined filters for the types of companies that they want to buy. I see people buying by very precise geographies and for very precise data or services needs. The large multivertical portfolio companies will continue to unwind. We had Nielsen, we had RBI (Reed Business Information); now, we have McGraw-Hill. People don't want dispersed volume; they want precise fits with narrow specialties.
MB: Do strategic b-to-b media companies need to increase their acquisitions of digital media properties?
Richard: Let's expand that to services, data, software and geograph-ically specific (acquisitions). The forerunners of the geographical expansion have been the events companies' moves into emerging markets, like Reed Exhibitions and UBM (United Business Media), and that's precision. This isn't just companies buying websites; it's companies buying properties to acquire very specific skills, talents and tools.