“Inside Network Inc. is a leader in covering the Facebook and social gaming ecosystem through reporting, research, and events,” said WebMediaBrands CEO Alan Meckler. “When combined with our leading social media blogs such as AllFacebook, SocialTimes, and AllTwitter, I believe that WebMediaBrands is now the leading source of news and information about Facebook, social gaming, Twitter, and social media.”

“We plan to move aggressively with initiatives designed to grow our combined editorial, research, and events operations, as well as dramatically augment our online education coverage of social media and our job board presence in the social media arena,” he added.

“This is pretty awesome news for those of us in the WebMediaBrands family, because along with the acquisition comes some of the best experts on Facebook and social games in the world,” writes Neil Vidyarthi at Social Times.

Inside Network Founder Justin Smith said, “WebMediaBrands has created a powerful platform for delivering news, research, education, and events to the social media industry. Since our founding, Inside Network has always focused on providing the highest quality information, research, data, and events for the social app ecosystem. Combining our efforts should naturally enable us to move even faster to deliver products and services to this rapidly growing industry in multiple areas, including industry news and research, conferences and events, and job listings for the social and mobile application ecosystems.”

Smith will become VP, Social Media of WebMediaBrands, and will continue to operate Inside Network. He will also become a member of the board of directors.

WebMediaBrands, which used to be JupiterMedia sold Internet.com for $18 million about two years ago.

We hope to close an acquisition late next week or early the next. And perhaps another by month end. Both exciting. More…

Our present platform plus coming deals will make us one of the more exciting blog networks in the BtoB space.

Rafat Ali suggested the possibility that Meckler is interested in either Silicon Valley Insider or Mashable in this tweet:

Henry Blodget of The Business Insider, Inc. mocked the rumor a bit in his blog post:

"Holy sh&$!  Are we being bought?   Where are some investigative journalists when we need them?"

—-

My guess is that of the two web properties the purchase of Mashable is most likely because of their recent steep pageview growth. It’s also interesting that there hasn’t been a tweet or a blog post from Pete Cashmore of Mashable commenting on this rumor. 

“We believe that this transaction will be beneficial to WebMediaBrands and its stockholders as it will significantly improve our balance sheet and at the same time allow us to focus on growing BtoB communities in the non-tech space,” said WebMediaBrands Chairman and CEO Alan Meckler in a statement.

From the release:

The Board of Directors of WebMediaBrands unanimously approved the transaction and resolved to recommend that WebMediaBrands’ stockholders approve the transaction. Completion of the transaction is subject to approval by WebMediaBrands’ stockholders and other customary closing conditions. In addition, Alan M. Meckler, WebMediaBrands’ Chairman and Chief Executive Officer, and certain other stockholders, who, with Mr. Meckler, collectively hold approximately 39.5% of WebMediaBrands’ outstanding stock, have entered into definitive support agreements with QuinStreet, Inc. to vote a total of 37% of WebMediaBrands’ outstanding stock in favor of the transaction. The transaction is not subject to a financing condition. WebMediaBrands expects the transaction to be free of taxes.

WebmediaBrands will continue operating its online business, which still includes sites like MediaBistro.com and Graphics.com, as well as job boards, online education offering, and tradeshows.

Revenues for the third quarter of 2008 were $31 million down from revenues of $34.8 million for the same period last year. The company says its loss per diluted share was $0.63 and included non-cash stock based compensation expense, legal fees related to the recent signed stock purchase agreement with Getty Images.

Jupitermedia is selling its online image business to Getty Images for $96 million in cash. The company expects to incur a non-cash loss of about $95 million when the sale is completed. Jupitermedia says they sale of Jupiterimages will allow it to re-focus the company on the B2B content business which is a move in the right direction.

Jupitermedia says the sale of its image business will allow it to focus on its online media business which includes internet.com, EarthWeb.com for IT and business professionals; DevX.com for developers; and Mediabistro.com and Graphics.com for media and creative professionals.

"In a very difficult business environment we have some significant highlights. Revenues from our JupiterimagesUnlimited royalty-free subscription offering grew over 100% for the nine months ended September 30, 2008 compared to the same period in 2007.

We continue to experience significant growth from our Stockxpert.com microstock offering, both with single images and subscriptions," stated Jupitermedia’s Chairman and CEO Alan M. Meckler.

"Our Online Media division continues to be impacted by the economy, which has put pressure on our advertising and job board sales. We have, however, made progress in reducing operating expenses, specifically with our costs of sales and general and administrative expenses.

In addition, we have made additional investments in our Online Media business, with the launch of three new blogs focused on Mobile media and a new event, UGCX, which is focused on user generated content and social networks."
 

This follows a difficult time for Jupitermedia which last week announced an agreement with Getty Images to sell Jupitermedia’s online image business for $96 million. Jupitermedia stated that they expected to incur a non-cash loss of approximately $95 million upon the closing of the transaction.

Chris Cardell had been President and COO since the company’s inception in 1998. Chris was very instrumental in the building of internet.com into one of the web’s top B2B and tech news and information portals.

Effective immediately, Jupitermedia’s CEO founder and Chairman Alan Meckler, will also serve as President and Chief Operating Officer of the Company.

Alan Meckler comments in the press release:

Chris Cardell has been an important contributor to the growth and success of Jupitermedia. He has been with us through our many business acquisitions, sales and other transactions, and never wavered under the pressure of a very demanding workload," stated Alan M. Meckler, Chairman and CEO of Jupitermedia Corporation. "While it is never easy to part company with a long-time colleague, we are fortunate that Chris has developed a strong management team under his direction and that we will not miss a beat through this transition. We all wish him continued success in his future endeavors," added Meckler.

Added note: This is another Chris in a string of Chris’ who have left Jupitermedia management over the years as we reported in this 2006 blog post.

Jupitermedia’s board of directors has approved the transaction and has recommended that its stockholders approve the deal as well. The deal has to receive regulatory approvals and customary closing conditions.

Alan Meckler, Jupitermedia’s Chairman, Chief Executive Officer and a significant stockholder, and certain other stockholders, collectively own 35.9 percent of the company’s outstanding stock, already have the votes lined up to agree to the deal.

With the sale of its image business Jupitermedia will now focus on its online media business, which consists of five networks: internet.com, EarthWeb.com for IT and business professionals; DevX.com for developers; and Mediabistro.com and Graphics.com for media and creative professionals.

Jupitermedia will retain ownership of its Peoria, Illinois building and property and lease the facility to Getty Images. Jupitermedia expects to incur a non-cash loss of about $95 million when the deal is completed.

"We believe that this transaction will be beneficial to Jupitermedia and its stockholders, both in the near term and the long run, as it will allow Jupitermedia to pay off all of its bank debt. Upon closing of the transaction, we will continue focus on the further development and growth of our Online Media division," stated Alan Meckler.

 Jonathan Klein, co-founder and CEO of Getty Images stated, "Jupiterimages has built a foundation that Getty Images will build upon to the benefit of customers worldwide". Klein added, "Getty Images has always been dedicated to making strategic investments that will provide long-term value to our customers".

A previous deal to sell Jupitermedia to Getty Images fell apart in February 2007. That deal according to press reports was for around $450 million, with a potential buyback of non-image assets such as internet.com for $100 million.

Jupitermedia founder, Alan Meckler

[Disclosure: I own shares in Jupitermedia and have since I was employed there in 1998-2000. My opinions here are purely my own and I have no current inside knowledge about the company.]

Jupitermedia owns in my opinion the best domain the Internet has produced, internet.com. With the company severely undervalued by the market, I believe they should re-brand Jupitermedia as internet.com again. The company had its greatest success under this brand and could use this name recognition to remake the company as the great B2B content network it was.

This is not to say that Jupitermedia still does not produce great content, because it does. However, the buzz that internet.com was the Internet’s next Cnet.com and the place to go for internet business and tech content has been somehow lost in the shuffle of their growth and focus over the last few years.

It’s obvious that the image market (which Jupitermedia is currently a top three player in) has proven very difficult. Micro image sites that sell images for a dollar or less have commoditized the image economy and this has taken the growth out of the digital image industry. In the long run, this division of Jupitermedia needs to be sold, spun off or otherwise separated from their content side.

I have seen suggestions that Jupitermedia ought to change its name to mediabistro.com, after the site was purchased for $23 million a short fourteen months ago. I think that would be a mistake that would serve to lower their name recognition, not raise it.

A name change to internet.com, on the other hand, would have huge name recognition from the start and would tell its advertisers and its site visitors that the business and tech content giant is back and roaring!

Let me know your thoughts on this below…

Affinity Labs is a start-up of Christopher Michel who in 2004 sold community site Military.com to Monster for $40 million. The Military.com community has since exploded in traffic and has been a phenomenal financial success for Monster according to all accounts. Christopher Michel has also partnered with Monster to sell advertising for the Affinity sites.

The sites reportedly receive about 800,000 visitors per month combined.

The sites as listed by Monster are:

– PoliceLink: www.policelink.com

– FireLink: www.firelink.com

– GovCentral: www.govcentral.com

– NursingLink: www.nursinglink.com

– ArtBistro: www.artbistro.com

– TechCommunity: www.techcommunity.com

– TheApple: www.theapple.com

This makes Alan Meckler’s July purchase of vertical jobs oriented community site mediabistro.com for $20 million cash and a $3 million earn-out a significant bargain. Unlike Affinity Labs, Mediabistro is an established web business that was founded in 1997 and had estimated annual revenue of $5-6 million. Affinity’s revenue is likely much less and has a business history of only about one year.

Obviously Monster is relying on it inner knowledge of Affinity and its very positive history with the founder.

Vertical communities continue to be red hot acquisition targets!

Mind you, we’re still not at the level of complete transparency – such things aren’t good for business, and would, if we’re to be honest, represent far more than most of us want to see.  But in any case, Meckler writes, "Just wanted readers to know that I could not resist buying more of our stock on Monday – obviously the last trading day of the year."

On a corporate blog, he then continued, "I am now precluded from buying stock as we approach reporting our fourth quarter and yearly results.  My purchases do not guarantee that Jupitermedia’s stock will rise or even that 2008 will be a good year for us financially.  However, I do feel confident in our assets including our employee team and that the various initiatives and changes made in 2007 will be beneficial for the company."

Fair enough, and also fairly complete.  It was on the subject of future changes that things got a little vague.  A name change here, an emphasis on the image business there – nothing at all specific.  Two of the most solid hints related to new stuff from Stockxpert and fresh tradeshows, however, which sound interesting enough.

Now, it’s entirely possible that in another week or two, some diabolical scheme will be uncovered and all of this will be viewed in a very different light.  Yet for the time being, we’ll just applaud Meckler’s move and take his words for what they are.

Now that both companies have been sold, Danny Sullivan speaks-up and offers his candid thoughts. Turns out, the whole thing was a charade…

If SES and SEW were feeding off of JupiterResearch, I certainly never felt it. I like the people at JupiterResearch, both those that are still left and those recently departed. But we had no real synergy between the two. We did our own things and coordinated nothing. JupiterResearch would have banners at our shows, and in the last year, I’d give them a track on the first day, but I never got the impression we were somehow thriving because of that track.

Ouch!

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Andy Beal is an internet marketing consultant and considered one of the world’s most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.