Peter Kafka

Recent Posts by Peter Kafka

MetaCafe Grabs Action Sports Without Paying a Penny

The online video shakeout is happening, though not as quickly as you might have thought two years ago: Instead of going away overnight, video sites that aren’t YouTube or Hulu are quietly circling each other. Everyone talks to everyone about a potential deal, though few of them actually get consummated.

Here’s one that did: MetaCafe has bought Action Sports, without laying out any cash. MetaCafe CEO Erick Hachenburg won’t put a value on the deal, but says it was an equity transaction between the two private companies.

So what does he get for his equity? In addition to the four million visitors that Action Sports’ Go211 gets a month, MetaCafe will also get a new chief revenue officer, in the form of former Action Sports CEO Sean Aruda.

Hachenburg will keep Go211 operating, but the real goal is to use the sports sites’ video to stock a new vertical for MetaCafe itself, expanding on a strategy the company has been pursuing for a while. Meanwhile MetaCafe, which came close to a Yahoo (YHOO) sale in the months following Google’s (GOOG) YouTube buy a few years ago, is staying independent, despite hiring bankers Think Equity to shop the company/pursue “strategic investors” last year.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work