Targetspot and Radionomy

Yesterday we announced a deal that I have been working on for the past three months. Our portfolio company Targetspot has merged with Radionomy, the leading streaming radio company in Europe.

The combination creates the largest global audio ad network and brings Radionomy to the US. It also gives the Targestpot network an anchor tenant that will make it easier to do sophisticated targeting campaigns that require both scale and reach. Advertisers can now leverage the capabilities of a digital audio network with reach to over 75M listeners and more than 80 publishers in both the U.S. and Europe.

The streaming audio business has gone mainstream in most parts of the world and is operating at a very large scale now. The advertising opportunities in streaming audio are attractive and there is no better place to reach a large and diverse base of listners than the Targetspot network.

I always look for mergers where 1+1=more than 2. This is one of those. And I am excited to see what Radionomy and Targetspot can do together.

#streaming audio

Comments (Archived):

  1. awaldstein

    Best of luck with this. Not companies or a market that I’m very familiar with.Have a fair bit of M & A experience, and mergers certainly can and do work wonders at times when the pieces, the market and luck all come together.

    1. fredwilson

      yup. luck is certainly a part of it. to me the most important thing is how you integrate the teams and cultures

      1. awaldstein

        I spent 3 years buying small co’s and integrating them as lines into a public company’s platform offering. Culture part and founder motivation was really tough.Small to small where the pieces are more visible should be easier.

        1. Jigdel

          Maybe an MBA Monday post on M&A and the risks people overlook? It would be interesting to hear Fred’s take and also from the AVC community (you, William, JLM, Dave,..I think I might be in trouble for naming just a few regulars).

          1. awaldstein

            I believe Fred has covered this but always an interesting topic.I do wonder at times about the after asset market. Most startups don’t make it. Very few build brand value and collapse, many built pieces of technical value with teams that have transferable value.I just sold a piece through my networks but wondered whether there is or could be a marketplace.

          2. PhilipSugar

            I have always thought that there has to be a better way if a company got funding had some success, but looks more like a lifestyle business than a venture business.It seems that there is value wasted. The problem is that few VCs and frankly few founders want to accept that reality when faced with it. If the company has any hopes its more tempting to do a hail-mary, and change management, or merge, or do something rather than write down the preferences and continue slogging along.

          3. awaldstein

            Crisply said.Yup its hard to sometime take a clear look at reality.i know. For all my chops in biz, there is still a sting when aspirations touch a changed reality.

          4. LE

            “lifestyle business”I think it’s the tendency of some people to want to be impressive and build an empire. [1] I know one guy who was a lawyer and told me specifically he always admired people in suits growing up and he wanted a career where he could wear a suit and be respected. Have you ever seen how worn out some lawyers are? Good for you you look impressive.So people go for more than a good income and security and control. They want respect, many employees (which shows power) a big building perhaps. Knew a guy who had all of that. Went bankrupt. Couldn’t even buy the nicer car or his union employees would want a raise.Quite common in this world for someone to be more impressed with someone who had something big that failed in a big way than the local beer distributor that has a nice, um, “lifestyle” business and doesn’t have to answer to anyone. (Actually he does but let’s go with it).The whole way of referring to something in a deprecating way as a “lifestyle” business reminds me of the way the term “mom and pop” is used or “main street”. Like “oh it’s so cute”.[1] Noting your blog tag line “Not a VC funded, moon shot, rock star entrepreneur, just a technology entrepreneur that runs profitable small technology companies”. Almost apologetic in nature.

          5. PhilipSugar

            A long while back, there was a long discussion about lifestyle businesses, and the fact you don’t get 15 minutes of fame in techcrunch. There was a great post that at the time was and all time most liked where somebody talked about pushing the ball up the hill and realizing that happiness was what you make it.You take my tag line as apologetic. It is defiant. I am proud to say I have run a lifestyle business. I take the pejorative term and throw it back in your face.

          6. LE

            Interesting.The only thing I would change about it (if it were my tag line) is redacting the word “small”.I personally feel it’s deprecating [1] to an otherwise very well put tagline. And besides “small” can be big to some people, right?Look at all Texas (and NYC) for that matter has done for their image by all the shit that they shovel constantly. And how deprecated Philly is with it’s crappy attitude.Compare Brooklyn to Northeast Philly. Brooklyn wins in attitude hands down. (And it should now but it wasn’t always that way).[1] Like Delaware. “Small Wonder”.Why not just “Wonder”?

          7. PhilipSugar

            Because you revel in your size. I go to several restaurants that flaunt the fact they are small. Look at this one… exactly one year in advance at 7am:

          8. LE

            That’s an admirable gimmick. “Call one year in advance”. Got you to mention it to me. More so than “had great ribs at Brio!” Now I’ve heard about it. My first thought was it might be worth my while to drive to mushroom country. And I’m not even a foodie.Second in line for the “shovel” award is:Chef Vola’s in Atlantic City: the missing phone number and how they proudly say that there is no phone number). Wow I mean the food must be so so good.See this:http://dinersjournal.blogs….See how people love talking about quirks like that?Because it’s unusual and stands out and get’s people talking.Another version of this was the soup nazi on Seinfeld.Apparently you can go a long way with a small place and a shitty attitude (and a good product) or maybe it’s just if you don’t have the capacity you can just say “no soup for you”.I love things like this by the way. Thanks for pointing it out.

        2. PhilipSugar

          I’m not sure. My sample size is small, but I’ve acquired a small company 100 person acquiring 8, I’ve been acquired 8 people acquired by 4,000, and I’ve done the 80 person merging with 80 people.The two acquisitions were successful, the merger ultimately failed. Teresa had a good post on it where she said when you do a merger people do a Noah’s Arc (two of everything) or deck of cards deal one for you, one for me, etc.Its really hard to do the integration when its not clear who is on top. Add to that very different funding levels and preferences and things really can get sticky very quickly.

          1. awaldstein

            Agree…Honestly my experience has been mostly as the bigger fish buying the smaller one and integrating.Merging of equals my thinking if more conceptual and less ground in data.

          2. LE

            Not to be a broken record but people are analog and comprised of a zillion factors. So it makes total sense that it would be not only really hard to get this right but totally a wild card.Its really hard to do the integration when its not clear who is on top.By this do you mean “what the pecking order is”?

  2. jason wright

    never heard of either before. is there a branded radio station i might have heard of?how do they overcome the music ip chestnut?

  3. William Mougayar

    Congratulations. If you have been working on it for 3 months, I think that’s a good sign. In my experience, when mergers are rushed, the chances of success diminish.How would you compare this one vs. Flurry/Pinch in 2009 (e.g. cultures, size), and in this case, will the company be run from Brussels or New York?

    1. awaldstein

      Running US market from Europe? Not something I would choose to do.

      1. William Mougayar

        Soundcloud, Spotify, Skype (early days), Hailo, to name a few… are doing it. Actually I’d like to see more of that happening to show how global startups succeed. If you glanced at the LeWeb schedule last week, you would see the global nature of startups a lot better than currently portrayed by the traditional US media sites.

        1. awaldstein

          Global nature of a business is not the same thing of where management in country happens.Country managers runnig businesses is a model that I’ve always held to.You seem to disagree with this.

          1. Salt Shaker

            It’s prob less of an issue operationally, and overall effectiveness certainly will depend on the company’s biz model and how it derives rev., but I think it’s critical that sales & marketing be local to build/nurture relationships, seize opportunities, address cultural issues, etc. It’s awfully hard to drive sales strat and rev from afar, and do it well.

          2. awaldstein

            Sales, marketing, cust service in country has been my way.Ran Europe from SF with this model and the US from Asia.

          3. William Mougayar

            What I was saying is I like to see more startups headquarted outside the US that succeed globally. How they do it is another topic of its own.

          4. awaldstein

            ahh…I need a nyc to toronto dictionary today it seems 😉

    2. Richard

      The world is littered with failed Mergers.

      1. William Mougayar

        yup. yet, it keeps happening, but the few that succeed do well.

      2. ShanaC

        why is that

    3. fredwilson

      flurry/pinch was a home run. if every merger worked that well, well then …….

      1. William Mougayar

        any lessons from that? or was it also a combination of factors that helped make it so?

  4. JimHirshfield

    Congratz. Seems like there’s a synergy (did I just use that word?) with Soundcloud as well. Are they working together?

    1. Rohan

      Synergy you say.. using cliches..mmm.Much to teach you I have, my young padawan.

      1. JimHirshfield

        At least I was self-aware when I used it. 🙂

        1. Rohan

          what did you take me for – a bad teacher??? Of course I taught you that much..Haha. I was just pulling your leg of course

        2. JamesHRH

          exactly. I remember people saying ‘that is a $250 / hour lawyer word.’Synergy is a $2M in fees iBanker word…..or a $25K an appearance marketing guru word…

      2. laurie kalmanson

        paradigm shift

    2. fredwilson


  5. Cam MacRae

    What is this radio you speak of?In this camp it’s been long since replaced with podcasts, for much same reasons as TV was replaced with DVR and on demand streaming.

    1. Aaron Klein

      600 million people think is “the Internet.” #OldHabitsDieHard

      1. Cam MacRae

        Fair call.

      2. Matt Zagaja

        Agreed, like it or not most AVCers are probably living their lives at the front-end of the adoption curve. I bought my first tablet when the second iPad was released. I saw a few other peers get them, but only now am I seeing a lot of my “non-techie” friends ask about tablets and they’re asking about using Kindle HDX or Nexus 7 as a reader.

        1. Aaron Klein

          Every technology wave looks eerily similar. 🙂

        2. JamesHRH

          There is an easy test for this – how many people do you know who are on Twitter. Many, many people I know who are on the FB on not on the Twitter.

      3. ShanaC

        I’m not sold that is what they think

      4. LE

        They are wrong. AOL is the internet. (Do you remember when that was the case – it actually preceded what you are saying.) I also remember someone asking in some kind of a meeting (was 1996) “what is the keyword for that” which is what AOL used for everything.

        1. Aaron Klein

          Yes, and for many, it’s still Google. I know really smart people who google every web site they go to. Even ones with short domain names.

          1. LE

            Reason for that is that it’s less error prone than typing the domain directly. In other words you can make a slight typo and google will figure out where you want to go. Or with a name like riskaylese.comGUESS WHAT? I even do that and it’s my business.That’s how I know.Hey, check what I got when I google “riskaylese”

        2. JamesHRH


      5. laurie kalmanson

        there probably is an aol cd in the box i didn’t unpack the last time i moved

  6. pointsnfigures

    Here is an academic perspective on M+A:… Always tougher than it sounds. Whom ever has the dominant culture going into the merger usually survives the most intact, and that culture dominates post merger.

    1. Jigdel

      There is a typo (“research”) in the link. Thanks for link!

      1. pointsnfigures

        thanks, i type links on this blog b/c I can’t cut and paste them.

    2. ShanaC

      how do you define dominant culture?

      1. PhilipSugar

        That’s the exact problem.

        1. LE

          “the dominant culture” could be the people (among the group that stays that is) that is best able to force their will on the other side. Assuming that is that both sides aren’t reasonable and cooperative. (Similar to marriage). So those as a group at the company (once again that have remained) that is able to wear down the other group.(A guess on my part by what I know about human nature in similar situations. For example outworking other people in the same group by just putting in more effort than they want to or are able to do so. I do this from time to time.)

          1. PhilipSugar

            You have outlined the problem. Any of that serving the customer?

          2. LE

            Of course not.But people are people and they will go to protect their own interests. Because that is the behavior of the group. Any individual might actually not want to do it but they are surrounded by others who do SO “they can only be as honest as..” (you know the saying by now).Look I had a case of a guy working for me and every time we brought on a new person in the same department (he worked some machine) the guy would mysteriously never work out. Try as we did couldn’t stop that behavior. The guy just wanted to be the king of it all. He has survived past me selling that business. He is still there to this day. He is that good and dependable but has this particular flaw. And if he were easy to replace and didn’t provide value he would have been fired.I mean look at it from his point of view. Why would a working class guy who has to feed his family (iirc his wife had cancer also) want to have a new hire outshine him and make him less valuable?Animalistic behavior. Just like most dogs don’t share their bones.As far as my personal comment “I do this from time to time” an example might be doing a rope a dope when I want to push through my agenda by providing enough collateral material and research to support my position. (All the truth I might add. I don’t cheat it takes the fun out of it. ) The other “side” if you want to call it that can do the same. But they don’t because they are lazy so I end up winning on effort. After all I’m not going to fight their battle for them.

      2. pointsnfigures

        In most cases, it’s the firm that is acquiring the other firm. Usually one is larger than the other. In this case, I don’t know who’s bigger or smaller or anything about them or terms.

    3. JamesHRH

      John Chambers of Cisco fame was quoted during his M&A heydays as ‘ we only look for cultural fit.’

  7. leapy

    Hope this allows Radionomy to sort out their mobile presence. I had never heard of them despite being an avid UK user of TuneIn, Radio FM and BBC iPlayer. I just went to their website on my Galaxy S4. Still know very little!

  8. Salt Shaker

    I had an exploratory meeting w/ the CEO of Targetspot a few years ago. Always liked the company’s value prop for delivering one-on-one targeting capability, by genre, by daypart, location, etc., but thought their biz at the time was slightly ahead of the curve in the notoriously unprogressive and slow-footed radio industry. Sounds like they now have even greater scale, but I wonder if streaming services like Pandora, Rhapsody, Spotify, etc., have become the real beneficiaries of listener migration from terrestrial radio. TS has a compelling story, but how well is it being told and at what volume? I wouldn’t think many on this thread are familiar w/ TS, unless you’re on the media/marketing side of the biz. Digital radio is very, very fragmented and fraught w/ onerous royalty issues, channel conflict, etc., that will likely impact several players’ long-term financial viability.

    1. JamesHRH

      The weird thing here, for me, is that when I stream radio, I, well, stream actual terrestrial radio stations…..

      1. Salt Shaker

        I stream KCRW (Santa Monica) and some terrestrial jazz stations. New York radio, and most radio today for that matter, is positively atrocious. I don’t have the time or patience to mine the premium streaming services for content, while services like Pandora to me are novelty acts. Soundcloud and Pitchfork are interesting sources, too.

  9. Bruce Warila

    Congratulations. Although Echonest is working with TargetSpot, music preference-based ad targeting is something I spent 18 months on ( Sad to say that our team didn’t execute. One quick thing: the CTR for targeted display units with (music) play buttons was notably better than display ad units that did not have play buttons; in addition, calling out targeted music fans (“Hey Dave Matthew’s fans…”) also drove up CTR rates. Best of luck. It’s a good space to be in.

    1. Richard

      But please, please, don’t crank up the ad volume.

      1. Russell


  10. Gary Chou

    Congrats, sounds like a great outcome!

  11. Richard

    Why are Press Releases written in a way you are sure that the writer has no first hand knowledge of the services of the company?

  12. Richard

    Hire Mel Karmazin as the next CEO. Nobody knows radio like Mel.

    1. Salt Shaker

      Mel K. was the ultimate disruptor. Left a vapor trail wherever he went.

  13. Harry DeMott

    Congrats Fred.Now all you need to do is get a deal going with TuneIn – and have Vadio switch out all the terrestrial ads so that you can sell them through Targetspot!

    1. fredwilson

      we’ve tried

  14. Marty Gottesman

    Exciting news. Giving music ads a global audience will help digital closethe gap with terrestrial. And when digitalaudience numbers grow to those levels, so will the advertising rates, and digitalroyalties could be sustainable for artists in the way that terrestrial alwayshas been. Great work.

  15. kenberger

    I met with Adi and CBS back in 2006, partly with your referral. Exit came 7+ years later.

  16. Holden Caufield

    This post totally depresses me. For as much as Fred talks about “innovation” and “disruption” and seriously changing things, this sentence of his stands out above all others: “The advertising opportunities in streaming audio are attractive.” After reading this blog since ’06 my complaint persists: I fail to see how advertising is innovation or game changing or whatever other bullshit buzz words we learn each year. I don’t begrudge Fred making money. He seems like a totally cool dude and I’d love to have drinks with him at a place with a good jukebox. But goddamn. If the internet is never going to progress beyond something that you can slap ads around, the capitalists will have really fucked it up.

    1. fredwilson

      stop whining and do something about it

    2. Daniël W. Crompton (webhat)

      It’s not the post, it’s teenage angst.

  17. Corey Podolsky

    Congratulations Fred. I’m a big fan of Radionomy and we’ve (obviously) been working with TargetSpot since the beginning. This is as close to a win-win as you could hope for!