DealBook gives uncritical link love

DealBook is linking to blogs,

which is a good thing. But someone at the NYT should probably be reading them

more critically, I think. The NYT’s headline is now "UPDATE: Is NBC Stealing

iVillage at $600 Million?", based on a very

sketchy analysis by Paul Kedrosky:

GE’S NBC unit isn’t paying anything like a MySpace-style premium for women’s

destination site iVillage. Picking the company up for $600-million works out

to 5-times annualized fourth-quarter sales, or 17-times annualized fourth-quarter


What Kedrosky fails to note (but Marketwatch is very

clear about) is that iVillage had a very exceptional fourth quarter, with

"a nearly fourfold increase in net income on a 65% jump in fourth-quarter

revenue." I’m sure that NBC thinks those figures are sustainable –

indeed, that they’ll continue to grow. But Kedrosky’s conclusion that NBC is

getting some kind of a bargain, compared to MySpace, is pushing things. After

all, iVillage has nothing like the buzz and the momentum that MySpace has: it’s

basically an old-fashioned media play selling ads against self-published content,

as opposed to a leveraged internet play like MySpace where the users provide

the content and the website gets all the ad revenue. Comparing iVillage multiples

to MySpace multiples and concluding it’s cheap is like comparing New York Times

Company multiples to Google multiples and concluding the same thing.

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