Updated: News Corp To Buy 10 Percent Of Online Video Syndicator Roo Group


Updated below, with the official release: News Corp is buying about 10 percent in online video syndication firm Roo Group (both share Australian heritage). The deal, valued around $12 million, hinges in part on News Corp. reaching revenue goals using Roo’s technology, the WSJ story says. ROO provides video tech for FoxNews.com and many News Corp. newspaper sites in the UK (Times UK and The Sun) and Australia.
Roo last week announced buying MyVideoDaily, a video sharing site. The company competes against the likes of Brightcove, though the content partners till now in Brightcove have been bigger than Roo…so have the distribution partners. Roo, founded in 1998 in Australia, is now HQed in New York City and trades on OTC bulletin board.
Update 1: This from Roo’s latest prospectus to sell shares on the stock market : In 2005 and 2004, it generated revenues of $6.62 million and $3.94 million, and incurred net losses of $8.96 million and $4.22 million, respectively. At September 30, 2006 (end of Q3), it has a working capital surplus of $1.81 million and an accumulated deficit of $23.97 million. “Our auditors, in their report dated March 27, 2006, have expressed substantial doubt about our ability to continue as going concern.” It also has a total net revenue increased by $625,000 from $1.60 million in Q305 to $2.23 million in Q306, an increase of 39 percent.
Update 2: The companies have released official details: News Corp. will receive up to a 5 percent interest of the current fully diluted shares in Roo, and up to an additional 5 percent interest upon News Corp. achieving certain revenue-based milestones in its usage of Roo’s products and services or as a direct investment through an exercise of warrants.

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