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Prof-Media Gobbles up Internet Resource
Prof-Media announced its purchase of a controlling stock package in Rambler Media Ltd. yesterday. With that purchase and the purchase of the TV3 network, Prof-Media will become the largest media holding in Eastern Europe, worth over $1 billion. The further growth of its capitalization will depend on how the company manages its assets. Prof-Media bought 48.8 percent of Rambler Media from private funds, and will acquire an additional 6 percent in the near future. The value of the deal was not made public. The market capitalization of Rambler before the deal was $440 million. Based on that, 54.8 percent is over $235 million. Quotations on the company rose 1.2 percent that evening, for a capitalization of $473 million.
Rambler Media Ltd. owns entertainment resources and online services, including content providing. The holding includes a search engine, and one of the four largest Russian Internet portals, as well as the Lenta.ru Internet newspaper, broadband provider Rambler Telecom, the Index20 ad agency and Rambler Mobile provider of cellular telephone content. Stock in the Jersey-registered holding is traded in the Alternative Investments Market of the London Stock Exchange. Rambler's proceeds in the first six months of the year were $15,801,000 and net profit $2,477,000.
Ruslan Tagiev, media research director for TNS Gallup Media, noted that the total value of Prof-Media's assets by the end of the year will be around $1 billion. “But the total value of the company is already greater thanks to the market's expectations of the synergy of those assets,” he said, adding that it was the largest media holding in Eastern Europe. Analysts say that Prof-Media's acquisition of Rambler is a continuation of its diversification strategy that is orienting the company away from traditional media in favor of the electronic. While the general growth of the Russian ad market is expected to reach 28.8 percent in 2007, according to Zenith Optimedia, the Internet segment of the ad market will growth by 65 percent. Rambler, however, has been losing ground on that market for the last three years. “Rambler Media could double its capitalization in a year just by setting up a sensible sales system,” Lev Gleizer, general director of the AdWatch agency commented.
Market insiders say that Prof-Media's future depends on its effectively linking its online and offline assets. Mikhail Ushakov, head of the press service at Yandex, a Rambler competitor, noted that “there is already an example of a media resource in Prof-Media's portfolio that has successfully integrated online and offline. That is Afisha Publishing House.” Prof-Media head Rafael Akopov declined to comment on Rambler's integration within the holding, saying only that he wished to maintain it as a “pure” Internet company. Analysts noted rich opportunities for television-Internet package advertising, but, noted general director of Russian Media Ventures Kirill Lysko, “Both Rambler and TV3 need tuning… to return them to better indicators. Otherwise one of them will become ballast and if they attempt package advertising, they will unwillingly underwrite one of them at the cost of the successful project.”
Yulia Kulikova
All the Article in Russian as of Nov. 01, 2006
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