Barry Diller’s IAC is testing the waters on a partial exit of Vimeo, according to two sources familiar with the situation. The company is hoping to raise a $50 million round of funding in conjunction with a spin off of the hipster online video business.
IAC is looking to keep a 50% non-controlling stake in the business, with 25% going to new investors and the remaining 25% going to the management team.
The move was a surprise to some sources familiar with IAC. One source noted how much Diller “loves Vimeo,” as it was once the hope to bring the stodgy company made up of mostly Web 1.0 brands some Web 2.0 chic. A similar deal was rumored several years ago but never came to fruition, another source noted.
The deal isn’t a a clear win for investors. While popular among hip youths, Vimeo is no cash cow. Its audience is strong–more than 55 million uniques. Its revenues–we hear $5 million–are not. And yet, Diller and IAC are peddling the investment with a $300 million valuation attached. According to sources, the valuation reflects Diller’s affinity for the brand and will likely remain a sticking point. So far, the investors we spoke with balked at the figure.
Zach Klein and Jakob Lodwick, who worked at IAC after selling College Humor to the company, started Vimeo in 2004 a few months before Youtube was founded. The company’s insistence on sticking to its indie roots hasn’t done much to boost IAC’s bottom line or investor appeal. Even as its biggest competitor, Youtube, struggles to sell ads against user-generated content (and invests in original programming), Vimeo has remained staunchly focused on its users with no apparent business model. The closest its come to a scalable revenue is the freemium offerings of Vimeo Plus, which include HD video, a customizable video player and an increased upload limit, and the recently launched Vimeo Perks, a coupon service for film equipment.
However, a fresh infusion of capital–and with it, talent, sales, biz dev, or all three–could help Vimeo monetize its its loyal user base and become a sustainable business.
Like a lot of once-hot startups languishing under the roof of a large corporation, selling it off could be the best thing IAC could do for the brand.
IAC has not responded to requests for comment.
[...] month, PandoDaily reported that IAC was trying to “sell” Vimeo; when I asked Diller about that, he said the story [...]
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Like[...] month PandoDaily reported that IAC was trying to “sell” Vimeo; when I asked Diller about that he said [...]
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Like[...] them out so they could take on outside VC money while retaining a stake. It’s not unlike what IAC seeks to do with Vimeo. That way, Gilt could still benefit from the upside as [...]
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LikeRE: Erin Griffith and Pando credibility As Vimeo Plus Vimeographers we view reports of trouble at Vimeo with concern. Although I have no sources to cite, I am inclined to believe Erin's story. It has the “ring of truth.” The above comments could then be described as a resonance to that ring. As to Vimeo, they do a credible job in their niche market. Vimeo does host HD (720p and 1080p) videos at higher quality than currently offered by YouTube. However, YouTube video quality is improving and Vimeo may lose its edge. Of course, the YouTube viewing rate is gargantuan at around 4 billion videos streamed per day. Vimeo may be around 1% of that, at a guess.
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LikeMr. Lodwick came across like an ass. All the same, this article sited no direct sources and was poorly written to boot. You can't do both of those and expect to maintain credibility. Mr. Lodwick is no longer involved in Vimeo to my knowledge and we do know that millions of people use and love the site. Let that record speak for itself until there are proven facts. Anything else is Pando Daily's attempt to start rumors to build ratings. That's nowhere near as respectable as the vimeo brand and community that supports it.
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LikeMan... Startup Drama is waaaaay better than studio drama. Glad I became a serial entrepreneur!
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Likegrammatical
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LikeHA! Paul: the bio has a casual tone on purpose. Also, Jakob left that comment within a few minutes of me posting the story. Since it was a sensitive scoop, I was rushing to post the story and didn't skim it for typos until after I hit publish. Get off your *grammitcal* high horse.
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Like"Also, she plays keyboard in a band called Team Genius." There are far too many grammitcal and spelling errors for her to claim any journalistic credibility. I don't blame him; at the very least get his freaking name correct.
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Like[...] waste of hours of double-checking facts to just tweet it. (For example, if I had tweeted our scoop about Vimeo earlier this week before the story was published, Erin and Sarah would have been ticked [...]
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LikeNote to self: NEVER EVER consider to even test or mention a product that is released out of Elepath.
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LikeJeez, I hope you didn't misspell Elepath - like with a capital P or something. ;)
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LikeFortunately that other guy was an asshole about the poor editing in this article, so I don't have to feel bad pointing out the typographical error: "The closest its come to a scalable revenue" -> should be "it's." Duh.
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Like[...] TechCrunch employee, Sarah Lacy, and staffed with several former TechCrunch writers–got a pretty large dip yesterday, presumption it turns out to be accurate. According to “two sources informed with a [...]
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Like[...] TechCrunch employee, Sarah Lacy, and staffed with several former TechCrunch writers–got a pretty large dip yesterday, presumption it turns out to be accurate. According to “two sources informed with a [...]
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Like[...] IAC Trying to Sell Vimeo, Seeking $300M Valuation, pandodaily.com [...]
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LikeWe were using Vimeo to put out how quality videos and to be different than the usual Youtube users trying to interact with web savy folk so I hope that this doesnt change it. We were thinking about upgrading to the Pro but will most likely wait until this is figured out.
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LikeJesus. That turned into ridiculousness really fast.
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LikeJake - you are a fucking douche back. Fuck you.
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Like[...] IAC is reportedly looking to sell half of Vimeo. Last night PandoDaily’s Erin Griffith reported that “two sources familiar with the situation” say that IAC is pairing a spinoff of [...]
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Like[...] former TechCrunch employee, Sarah Lacy, and staffed with several former TechCrunch writers--got a pretty big scoop yesterday, assuming it turns out to be accurate. According to "two sources familiar with the situation," IAC [...]
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LikeWow. The main reason I used Vimeo was just to manage videos that exceeded YouTube filesize or time limits. I even paid for the Pro package. But I also use VideoPress. Thanks to this story, and after reading the mind-bogglingly crazy comments from one of the company's leaders, I'll be moving off Vimeo. I'm perfectly happy supporting indie companies with good business models and leaders. Vimeo's business model, and Jake, appear to be on the decline. I'm out.
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Like+1
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LikeIt's worth mentioning that Jake is no longer on staff at Vimeo and his comments are in no way indicative of the quality of Vimeo's current leadership and community of users. So citing his crazy but ultimately irrelevant comments as a reason to leave the service and community makes as little sense as the aforementioned condescension. Just wanted to point that out.
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LikeMost of my concern is related to the soft exit plans at this stage. It cries "fire sale" and raises the red flag that signals a need to protect (and move) our assets. People use Vimeo to support their businesses and other stuff that's important. The founder is no longer there - and yes, your point is completely valid. It's concerning to see a founder act like this though (regardless of current employment status). Meanwhile, where is the current leadership? It doesn't take very long to write a statement that would help reduce the stress of your current customers, and head off the potential for competitors to scoop them up. Looking to be acquired isn't a bad thing. Not preparing or providing any statement about it, and not communicating with your customers (unless I've missed some blog post or email message from them today?) = not good.
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LikeJake, chill out bro. Would have thought you were only kidding if it weren't for the travesty of an Internet blogging record you left behind from years past.
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LikeI think Vimeo should attempt to be the destination for independent filmmakers disrupting Hollywood. They 've got to go for more long form content. I love the site as is, but that move seems a no-brainer.
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LikeWow what dick. I give you the Jakoface... er JakoFace? http://i43.tinypic.com/11sj8ef.png
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LikeLooks like Jake is a little sensitive. I love vimeo (I mean Vimeo, sorry Jakob) but with an attitude like that from a co-founder I'm not so sure anymore.
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LikeI feel like Vimeo could be much more profitable than it is, and more useful to its userbase as well. There needs to be a simple monetization feature added that benefits both the content author and the site (with the majority of that going to the creator).
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LikeLet me be thorough: "Zach Klein and Jakob Ludwig, who worked at IAC after selling College Humor to the company, started Vimeo in 2004 a few months before Youtube was founded. The company’s insistence on sticking to its indie roots has made it hasn’t done much to boost IAB’s bottom line or investor appeal." It's "Jake Lodwick", not "Jakob Ludwig". It's "CollegeHumor", not "College Humor". It's "YouTube", not "Youtube". It's "IAC", not "IAB". You're like a radio DJ with a speech impediment.
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Likeouch
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LikeIt's Jakob, Jakob. Spacing and camel-case issues aside, the rest of the story is accurate though, right? You sound like a deeply pissed off founder. Which I suppose makes sense. Great first day scoop, Erin!
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Like> Spacing and camel-case issues aside... What about the *spelling* issues, you deceitful snatch?
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Like@Jake You seriously just need to take a chill-pill and shut the fuck up. Seriously? Calm down, dude and quit being pissed off at the world that your overrated video site failed miserably!
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LikeJake: it's one thing to correct errors-it's another to be a condescending, insulting prick about it.
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LikeRon, you're right, I did overreact to Erin's errors. Sorry, Erin.
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LikeHey Jake-off, I mean Jakob. You're a major F*** idiot. Shut your pie-hole, dipsh*t.
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Likesad, not even gawker thought this was worth picking up. nobody remembers who Jakob Ludwig is, his five minutes is over. world's saddest (former) millionaire found tending dead brand in obscure comments section. imagine if dating julia allison was your life's peak, and now all your time is dedicated to google vanity searches (or maybe yahoo vanity searches? have you heard about the new google search portal, mr Ludwig?), tending your dead brands, and misogynist comments. you've contributed a lot mr ludwig, you really deserve our respect. you'll be missed.
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LikeYour like an asshole with a ego impediment.
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Like"Jakob Ludwig"? wtf is your problem?
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LikeFixed, apologies.
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Like