Bolt.com Selling to GoFish for $30M

21 Comments

Bolt, one of the larger independent online video sites, is selling itself to GoFish to escape its copyright battle with Universal Music Group. We had been tracking this story as it developed, but the New York Times now reports the deal has gone through.

GoFish is a publicly traded video aggregation and search company. It went public through a reverse merger last October. GoFish had 1.4 million visitors in December, as compared to 5.3 million visitors to Bolt, according to comScore. GoFish is paying up to $30 million in stock for Bolt, out of its market cap of $134 million.

In an interview before the deal was done, Bolt CEO Aaron Cohen told us Bolt would be changing its focus, once acquired, to content creation. He said video aggregation, along with its legal intricacies and stiff competition, was no longer an interesting business. Bolt, he explained, would offer its skills at attracting and fostering an internet audience to would-be online video stars.

Bolt-GoFish would look to develop a roster of web content creators, and allow them to keep ownership of their content, Cohen said. This is a similar to efforts from companies such as CNET, blip.tv, and PodTech.

As for its existing content, Bolt is paying a settlement of several million dollars to Universal, and agreeing to pay royalties on any future videos that contain Universal’s music. While Bolt and other sites had defended themselves by citing the DMCA safe harbor — which allows them to wait a takedown notice about copyright infringement rather than using filters to screen videos– it seems that the law is carrying less weight these days.

Since the courts weren’t involved in the case, the law does not change. However, with sites under increasing pressure to police their clips or cut content licensing deals to support them, the precedent is being revised.

Cohen and Bolt president Jay Gould are also involved in a new project, called WikiYou, which has received seed funding from First Round Capital and Mayfield Fund.

21 Comments

Lainee

JJ,

Wall Street cares about revenue not hype. It also realizes the wave litigation has just begun, not to make money but rather to shift the balance of power to content providers. YouTube was the tipping point and now all Video aggregators are in the cross hairs of the distributors. Unless, the distributors can monetize their content with aggregators they will build their own and/or acquire their internet distribution.

By the sounds of it, you have an invested interest in GoFish going higher, look at the volume traded, it has dropped 90% a sure sign the stock is out of favor. If there is any prediction to be made, it will one day be a bottom feeder – a true penny stock.

JJ Stone

listened to conference. a key point i noted.. with bolt they are 20-25 percent of reported comscore domestic size of youtube… whatever that means?? youtube got bought out for 1.6 billion we are trading around a 125 million market cap. im telling you this can go up 4 times these price levels this year

JJ Stone

February 09, 2007
Publicly Traded GoFish.com: The Next YouTube
Could it be possible to use Alexa traffic data as a future indicator of the direction of a company’s stock price? We think so, as long as the company’s success is derived from the amount of traffic it receives on its site. Take GoFish Corp. (OTC: GOFH) as an example, a publicly-traded online video company that is ranked in the top ten of all online video sites. GoFish’s Alexa data for the site’s reach rose from 780.5 to 1,845 users per million in just little over a month. How can we confirm that the traffic at GoFish has increased to justify the Alexa ranking? Take the company’s word for it. In a recent press release, the company subtly mentioned that it has now built a community of nearly 6 million monthly unique visitors. In December when we last reported on the stock, GoFish had nearly 2.5 million visitors a month.

Recently, the company has signed numerous content license agreements, not solely relying on user generated content, to build its online video collection. GoFish has also signed an alliance with Kaleidoscope Sports and Entertainment LLC, to build exposure of the brand and increase advertiser awareness. The company hopes to take advantage of the industry norm of charging a rate of $25 per thousand impressions for ads shown before the playing of its videos.

The stock has risen from $4.37 in early December to yesterday’s close of $5.63, a nice 22% rise, but hardly reflective of the tremendous traffic growth and potential for that traffic to be monetized. GoFish has a market cap of just around $130 million. More should be known about the company’s results and further growth potential when it gives a presentation at Merriman Curhan Ford & Co.’s IP Video Conference on Tuesday and when it reports quarterly results.

JJ Stone

POST-2…Before I go any further, I’d like to talk about the YouTube acquisition, because financially, it’s not much different from GoFish.

You see, YouTube was financed mainly by a venture capital firm called Sequoia Capital. They invested roughly $11.5 million in the company in the past twelve months.

It turned out to be the investment of a lifetime.

That $11.5 million grew YouTube into a $1.65 billion buyout. We’re talking about a gain of over 14,000%!

GoFish is pretty much in the same situation. They’ve raised $12 million in financing . . . yet investment bankers were ready to investment 16 times more.

And it’s easy to see why Wall Street is salivating to get a piece of the action. With traffic to these websites growing every week, advertisement dollars going into online video are expected to grow dramatically.

ut one of the reasons I really like GoFish is that, in addition to allowing user-generated video (which is the business model of YouTube), GoFish is making itself unique by merging traditional media with cutting-edge Internet broadcasting.

You see, over the summer GoFish launched an Internet reality show called America’s Dream Date, a Web series that relies heavily on user-submitted video clips.

The launch was a stunning success, pushing GoFish into the number-four spot for user generated video on the Internet. As a result, GoFish caught the attention of major media.

On August 3, PC Magazine wrote “. . . some newer forms of networks, such as GoFish, create content to be broadcast exclusively online. Traditional networks like Food Network can run spots on television and on their Web sites to promote online programming, while newer online networks such as GoFish rely on the Web 2.0 culture of share and share alike to promote the show America’s Dream Date, which is a hybrid of The Dating Game and American Idol for the Web.”

GoFish plans to take the capital raised in financing to develop more proprietary Internet shows like America’s Dream Date.

This is going to be huge. And I think it spells the beginning of a new bull market in technology.

JJ Stone

POST-1…Birth of a New Internet Bull Market

First and foremost, GoFish is the only pure publicly traded online video company in the entire market. As word gets out about the company and its stock, there’s going to be a ton of investment dollars-both institutional and retail-buying this stock.

Why?

Because Wall Street desperately wants a piece of the online video market. They got shut out of the room in the YouTube deal. I mean, YouTube was a private company. There was no way for Wall Street or individual investors to buy stock in it.

But with GoFish, you can.

The word on the Street is that GoFish will hit $10 to $15 a share in the near term . . . and possibly $20 a share in 12 months’ time.

This assumes, of course, that GoFish isn’t acquired first by some big media company.

We’ve already seen this with YouTube, which you know was acquired by Google for $1.65 billion.

But did you know that other online video and “social networking” sites are being snapped up at huge premiums?

These sites are hotter than Super Bowl tickets. Take a look:

• News Corp. buys MySpace for $580 million in 2005
• AtomFilms acquired for $200 million by MTV/Viacom on August 10, 2006
• Grouper.com bought out by Sony Pictures for $65 million on August 22, 2006
• YouTube acquired by Google for $1.65 billion

Jay Gould

Hey Liz,

A lot of people have been misinterpreting the motives of the acquisition. I just wanted to comment to give a little clarity from our perspective.

We are merging Bolt with GoFish, settling our disputes, and refocusing our efforts on growth. The New York Times had unfortunately misquoted Aaron significantly in the article today. He never stated that we violated copyright law, rather we are settling to resolve litigation. There is no admission of wrongdoing on Bolt’s behalf in the settlement.

Thanks for the coverage and as always you can reach Aaron or I on AIM to discuss!

Jay

Jason L. Baptiste

This is the most retarded reverse merger/CRACKquisition so far in the Web 2.0 space. 30 million for a company that has about 4x the unique users, even though you’re worth 154 million. Oh wait, that’s the OTC Pink sheet garbage penny stocks. Just because this dog can do some cool tricks, does NOT mean it can escape its legal woes. I got my laughs for the night.

-JLB

Comments are closed.