Wallstrip - We have a winner

As you've no doubt read, Wallstrip was bought up by CBS with the official release happening today.

As an investor in Wallstrip, I'm delighted on many fronts.

First, the experiment worked.  When Howard Lindzon and I talked about the Wallstrip investment, we collectively knew it would be an interesting ride with respect to growing the audience, thinking revenue later, and planning the exit.

Howard fired on all cylinders.  The growth numbers were off the charts and the target audience was dead on with respect to lining up those that would want to purchase the Wallstrip franchise.  Howard's ability to get distribution deals with major financial news sources, having amazing talent in Lindsay Campbell, and a top notch team of writers/producers producing funny shows, all culminated in the CBS purchase.

Yes, there were several interested parties.  Yes, the investment produced excellent "VC level" returns. No, I can't tell you the financial details, all confidential.  No, Techcrunch got the numbers way wrong.

When the rumors started, the question of why would they get bought on no revenue was asked a number of times.

CBS (and other suitors) recognized a number of things:

• Franchise value.  The content clearly resonated with an audience that mattered to CBS and the others.  The continuing growth of that audience was clear and CBS put a value on obtaining that audience.
• Production value. When you break down the numbers with respect to what it cost to produce the show, the number of shows lined up, in the can, ready to go, etc, the purchase price makes good sense. Especially, if you add the franchise value.
• Outside the bureaucratic blob.  Time to market, content ready to go, distribution already established.  Try getting that done inside a giant machines like CBS (or the others).  The folks at CBS basically did the bureaucracy math and, presto, Wallstrip is a good deal.

As an investor in b5 media, this was an important opportunity for me to learn even more about the content business. There were big lessons learned with respect to Wallstrip that apply to b5 and other content businesses.

Finally, it was proof positive that handshakes are still alive, well, and doing business.  As I mentioned when I first did this deal, it was done on a handshake.  A good chunk of cash was wired into an account on a handshake and, as I type this, paperwork has never flowed back to me beyond a note about wiring instructions.

To me, this speaks volumes about Howard Lindzon, his business ethics, style, and (most importantly) his word.

Congrats to Howard, Lindsay,  Adam, Jeff and the rest of the team as well as my fellow investors.  A job well done by all.

The official press announcement is below:

CBS INTERACTIVE ACQUIRES WALLSTRIP,
AN ONLINE PROPERTY AND DAILY WEBSHOW WHERE STOCK CULTURE MEETS POP CULTURE
 

CBS Interactive today announced the acquisition of Wallstrip, an online property that produces and syndicates a daily webshow that combines irreverent humor with financial news. The acquisition was first referenced in Wallstrip’s program this morning (www.wallstrip.com).
 
While Wallstrip will maintain a separate identity, the Wallstrip team will work with CBS Interactive to build upon original web and mobile-based content and community.
 
“CBS recognizes that original web content - whether it’s news, sports or entertainment - is starting to show real traction with audiences, producers and advertisers,” said Quincy Smith, President, CBS Interactive. “As CBS evolves from a content company into an audience company, we need to build a team of talented web producers who get the growing online demand.”
 
In the six months since it launched, the Wallstrip team secured syndication for its daily content through properties such as YouTube, Veoh, iTunes, Yahoo! Podcasts, Google Finance, Yahoo! Finance, The Street, CBS Radio Affiliates, iTunes, AOL Uncut. Through these and other distribution outlets Wallstrip has built a sizable online audience.
 
“CBS is a great match for Wallstrip,” said Howard Lindzon. “The CBS Interactive team is committed to growing the property and expanding the programming while keeping true to the core product. We have a lot of room to grow inside of the financial news vertical and CBS will help us get there faster.  In addition, it will be exciting to watch what happens when the creative talents of Adam and Jeff are unleashed inside CBS Interactive.”
 
Continued Smith, “The Wallstrip team is made up of savvy and resourceful web programmers whose talents we will utilize as we build our next-generation roster of programming verticals.  Also, their distribution strategy of syndicating their content to many video properties rather than force people to visit Wallstrip.com is very much in line with the CBS Interactive philosophy.”
As part of the acquisition, the Wallstrip team, including the host, Lindsay Campbell, and writers and producers Adam Elend and Jeff Marks, will become employees of CBS Interactive. Wallstrip creator, Howard Lindzon will take on an active consultant role for the division.

Comments

[Derek Johnson]

How come you weren't mentioned in Howard's "exit interview" blog this morning? http://howardlindzon.com/?p=2043?

[Rick Segal]

Hi Derek,

What can I tell ya, many of the investors were not mentioned. We don't take it personal in my biz..

Thanks for stopping by.

[howard lindzon]

Rickster - thx so much for the kudos.

About that ppwrk ... :)

hoohah

[Andrew]

A nifty piece of work! Since, you've mention about a business franchise, well, I somewhat included it into my teaching at http://www.automatedbusiness.org