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Friday, December 15, 2006

BSkyB : Acquiring Content

The Times is reporting that Sky is about to buy 365media (formerly known as UKBetting) for £94m. Back in October, ukbetting announced that they had received an approach. In the first six months of the year Group Turnover was £62.4m and profit before tax was £200k. Even with net cash of £12m, Sky is definitely paying a big premium for the goodwill/brand. The various sub-brands are admittedly well known with 9.3m unique visitors/month. I’m sure Football365 is the #1 football website in the UK.

365Media composes of two businesses:

Gambling (£54.9m turnover)

Sports content sites (£7.5m)

I presume that the strategy is to add the Games Sites to SkyBet and the Sports content sites will become part of SkySports.

When Sky bought Easynet the route for capturing a share of the estimated £4.7bn market in 2010 for Access was pretty clear. It was more uncertain how Sky was going to capture a share of the £4.1bn in advertising revenues. The relaunch of Sky Anytime, the deal with Google and a purchase of 365Media gives an indication of the planned route. The Sky strategy is becoming more and more clear and it looks like the strategy has a much bigger content and advertising element than any of the other major ISPs. Knowing Sky, they will be using the content sites to heavily promote the other Sky services.

The other intriguing part of the deal is that the Chairman and major shareholder in 365Media is none other than Peter Dubens, who just happens to the Chairman and major shareholder in of Pipex…