Battery's Digital Media Investing:
What Gives?
Battery has an extensive history investing in the Internet and Digital Media sectors. Given the rapid changes afoot and the enormous breadth of the industry today, it may not be absolutely clear where we focus our energies. Follow the reallocation of advertising and commerce dollars and you will find our investment activity.
Over the past few years, Battery has assembled a portfolio of nineteen investments in what we refer to as the Internet and Digital Media sector. Our earlier history also includes sector investments in successful companies such as Akamai, Infoseek and SupplierMarket.com. Even with this record of investing in the Internet and Digital Media sector, it may be difficult to detect a pattern against the backdrop of a fast moving and highly fragmented market. In a somewhat frenzied investment environment, we often hear from entrepreneurs and other investors alike that they are curious as to what kinds of Internet and media-based businesses we consider for potential investment.
Our overall thesis is not particularly novel, but it is precisely the obviousness of the trends that suggests that there is enormous potential for value creation. We believe that the transition of consumer interest and activity to the digital world is leading to a fundamental shift in advertising and commerce expenditure that will continue to unfold over the next few decades.
Accordingly, we divide our Internet and Digital Media investing into two categories of companies that are benefiting from this far-reaching trend. The first category is consumer-facing properties (for all types of digitally-connected devices and media) that build, aggregate and monetize audiences, preferably in more than one way. We typically favor businesses that have multiple revenue streams, from either advertising, real or virtual transactions or subscriptions. Examples of existing investments that fall into this category include Angie’s List, Tennis Channel and World Golf Tour. The second category of emphasis within Internet and Digital Media is enabling technology. This group includes companies that provide the tools, software and services to make the first category of companies successful. Enabling technology is comprised of many segments, including ad targeting and networks, analytics and optimization and content authoring, management and distribution. Several current investments include Bazaarvoice, FreeWheel Media, Lotame and Spot Runner.
Battery will continue to invest heavily in the Internet and Digital Media sector given our deep-seated view that many more multi-hundred million dollar and billion dollar businesses will emerge from these markets in the future. Be sure to follow our investment activity and perspectives at both www.battery.com and my blog, www.venturegeneratedcontent.com. You can also email me at spatel@battery.com.
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