Can TNS and GfK fend off WPP?
The proposed nil-premium merger betwixt research giants TNS and German giant GfK took everybody by surprise last week -- but that didn't stop WPP's Sir Martin Sorrell firing off a £984m counter-bid and, allegedly, promising to roll his market research outfit Kantar into the mix. Sorrell likes market research because it's a "measurable" business, as opposed to advertising, for example.
Just as in the old days you never got fired for buying IBM, these days CEOs hire consultants McKinsey or Bain or Accenture just to show their shareholders they're getting the best advice (however useless it may turn out to be).
They don't do this with ad agencies any more.
Further down the food chain, they spend more and more on research; not necessarily to provide marketing insights to build their businesses but to provide a screen against criticism.
So to agency groups, it's about as close as they come to the corporate assurance business.
Not surprisingly, Sorrell sees this as a growth area but his own research businesses, chiefly RSGB (formerly Research Services of Great Britain) and Millward Brown (which made its name through qualitative research, ie consumer groups) have been lagging the field.
Kantar, which includes these and niche businesses like The Henley Centre, is fourth behind Nielsen, US healthcare specialist IMS and TNS. GfK is fifth.
Among ad agency-owned researchers, Kantar is not growing as fast as media buyer Aegis's Synovate.
So Sorrell (whose WPP pay reached the heady heights of £3.57m in 2007) needs to give his research business a reviving boot and, as ever, could do with a big deal to keep WPP growing.
The ad agencies (JWT, Y&R, O&M and Grey) aren't growing fast, particularly in Western Europe, because they can't win domestic business.
The media businesses (MediaCom, MindShare and Mediaedge:cia), apart from being a typographical disaster area, are doing OK.
WPP finds it hard to compete with giants like Google and Microsoft for the latest fashionable internet advertising company.
So research it is then, and the attempt by TNS and GfK to effect a nil-premium merger (ie, a share swap with no immediate cash for shareholders) is (potentially) manna from heaven for Sorrell.
He can offer shareholders an upside. GfK will almost certainly walk away if WPP goes hostile but TNS would be more than a tasty morsel, although there are obvious competition issues that may be insurmountable.
Now he's thrown his hat into the ring, Sorrell needs to win this one.
But don't underestimate those researchers. We may regard them as rather boring boffins but they can be a pretty ornery lot who are extremely protective of their independence.
The mouse roars on
Walt Disney Co made over $1bn profit in the first quarter of 2008, with the early Easter and weak dollar attracting record numbers of visitors to its theme parks from Europe and the Far East.
The company has also repositioned its resort hotels, offering cheaper packages to attract cash-strapped US visitors.
Films 'National Treasure: Book of Secrets' and Hannah Montana/Miley Cyrus's 'Best of Both Worlds' (what's happening to film titles, what's wrong with something simple like 'Cinderella'?) also did well and the company's sports channel ESPN led the TV side up too.
ESPN is particularly interesting. We keep reading that it's planning a big surge into Europe, with Premier League football in its medium-term sights.
James Murdoch and co at Sky will be viewing these results with interest and, perhaps, a little alarm.
Disney certainly looks as though it's got the firepower to compete.
Has Yahoo! got a secret plan?
Let's hope so. Its decision to reject Microsoft's improved offer (around $50bn, no one seems to know the true amount) is a real hostage to fortune. Its shares fell 20% on the rejection and some West Coast investors are reported to be reaching for their lawyers as they fear they may never see that money again. In the frame is Yahoo! co-founder Jerry Yang, who resumed the CEO's reins late last year.
Actually Yang would have been better off if he'd just remained a shareholder. Shareholders can reject bids on a whim, CEOs have fiduciary duties to all the shareholders.
Arguably this particular era of huge IT and internet companies is coming to a close; the world seems to have woken up to the fact that Microsoft's Windows operating system is not, er, quite as good as it's supposed to be and "open" systems will surely take over in the next 10 years or so.
Even Google's all-conquering ad system is under pressure as people realise that, although it may be quick and easy, it's also relatively unsophisticated as it delivers lots of contacts you don't really want.
And there's surely someone out there who will invent something better from his West Coast (or Chinese) garage, just like Jerry did with Yahoo! barely a decade ago.
So this actually might be a narrow escape for Microsoft (some of its shareholders seems to think so).
As for Jerry Yang, he'd better get his thinking cap on.
Stephen Foster is a former news editor of Campaign, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog www.editco.net and Politics of the Media for Brand Republic.