JupiterResearch Merges With Kagan as Jupitermedia Shifts to Imaging

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Jupitermedia Corp., New York, continued its increasing focus on the digital imaging market yesterday as it shed its JupiterResearch division.


JupiterResearch and Kagan Research LLC, Monterey, CA, which focuses on media business research, merged to form JupiterKagan Inc. And JupiterKagan, a portfolio company of MCG Capital Corp., acquired the JupiterResearch division for $10.1 million in cash.


Jupitermedia started shedding its non-imaging businesses last August, when it sold the ClickZ.com Network, which includes SearchEngineWatch.com and the Search Engine Strategies trade shows, to Incisive Media.


Instead, it is focusing on its rapidly growing Jupiterimages division, which specializes in selling commercial images. It has one other division, JupiterWeb, which operates four online networks including Internet.com and Graphics.com.


The imaging division makes up 80 percent of the company's revenue, said Aaron Kessler, an analyst with Piper Jaffrey Co., New York. In comparison, JupiterResearch made up only 8 percent of Jupitermedia's earnings in 2005.


For 2006, Jupitermedia projects $125 million in revenue for Jupiterimages and $33 million in revenue for JupiterWeb.


Jupitermedia chairman/CEO Alan Meckler told DM News that the company plans more acquisitions in the digital assets industry.


"It's an emphasis on images, but we have also made acquisitions in royalty-free music," he said. "We're a digital asset company, where we can sell a variety of assets to media companies."


Jupiterimages acquired VA Software Corp.'s Animation Factory Inc. in December, and last July it picked up PictureArts Corp. Acquisitions this year likely will be smaller firms, Kessler said, to help Jupitermedia "build its portfolio of images into its distribution capabilities."


Already, Jupiterimages' divisions, including AbleStock.com, Animation Factory and BigShot Media, are benefiting from promoting across divisions, Meckler said.


"We probably have well over a million customers who have purchased either animations or images or clip art or Flash movies. We cross-promote where appropriate," he said.


For example, Jupiterimages immediately promoted its FlashFoundry.com royalty-free Flash content service to Animation Factory subscribers earlier this year, soon after acquiring the Animation Factory.


"We brought in thousands of dollars of new subscribers," Meckler said.


Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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