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EXCERPTED
State of Digital Media: The M&A Perspective In min and paidContent's just-published The State of Digital Media, Volume 2, the Jordan, Edmiston Group, Inc., a provider of independent investment banking services for media, information, marketing services and related technologies, looks at the M&A scenario for digital media companies. In this book excerpt, JEGI gives an overview of media & information M&A, including a look back at 2009 and a look forward at areas of potential growth in 2010 and beyond.The first three quarters of 2009 saw 466 M&A transactions worth $16.4 billion announced across the media, information, marketing services and technology sectors, as tracked by JEGI, which specializes in acquisitions and divestitures across these core markets. While overall transaction volume fell 30% and deal value declined 42% through Q3, versus the same period of 2008, two markets actually saw growth in M&A activity in 2009 over 2008 – the Mobile and Education sectors. Education deals increased by 15% in number and 41% in value to $3.2 billion, as this sector benefits from innovation, government spending and some shelter from the economic cycle. Meanwhile, the Mobile sector saw 25 transactions worth just under $400 million, up 56% in number and 76% in value from 2008, as this long-expected market begins to accelerate.  Reheating Sectors Drive M&AThe most active M&A markets covered by JEGI overall have been Education Information, Technology & Training; Marketing & Interactive Services; Mobile Media & Technology; and Online Media & Technology. Together, these four sectors accounted for 337 deals or 72% of the transactions announced and 87% of deal value ($14.2 billion) in the first three quarters.Given strong growth forecasts for online advertising in the years ahead, interactive and mobile categories continue to see active M&A. According to Rob Norman, CEO, GroupM Interaction, global Internet advertising will climb 11% to $64.7 billion in 2010, accounting for 15% of all global measured ad spending, up from a 13% share in 2009. Meanwhile, global mobile advertising is expected to climb 19% to $3.3 billion in 2010. A recent Yankee Group report estimates that nearly 7 billion U.S. smartphone application (app) downloads will generate $4.2 billion in revenue by 2013, up from $343 million in 2009. With the number of U.S. smartphone users set to quadruple to 160 million by 2013, Yankee Group describes the anticipated market growth as a gold rush. min & paidContent's The State of Digital Media, Volume 2, also includes Digital Media Boxscores and chapters on monetizing social media and the state of digital advertising. COMMENTS
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