14:33 PM

FM Publishing Becomes A Media Company With BigTent Acquisition

Federated Media Publishing, the online advertising network, has acquired BigTent, which publishes blogs and hosts groups of people focused on parenting and schools.

The amount of the acquisition was not disclosed but Kara Swisher from All Things D reports:

"BigTent has raised $5 million in venture funding from Menlo Ventures and Mohr Davidow Ventures."

The move is FM's first in owning media content sites rather than just working with third-party web sites recruited into its advertising network.

Foremski's Take:
In early 2008 I had predicted that advertising networks would need to acquire media companies. The reason is that once client media companies reach a size large enough to run their own advertising, they leave the advertising network, or use it for less valuable content.

FM Publishing has lost several large clients such as Techcrunch, GigaOm, Digg, and others.

"The math is compelling. Ad networks will start buying up online publishers because: they'll make more money, they won't get dumped, and they can monetise online content far better than the online publishers currently can."

The acquisition transforms FM Publishing into a media company with its own advertising network. It will have the means to make further acquisitions, most likely in content.

The question now is if other advertising networks, such as NetShelter, will make similar acquisitions. Such a trend would raise valuations for some online media companies.