Last week, it was reported that AOL – amid restructuring efforts in the lead-up to the imminent Time Warner spin-off and IPO – was putting its instant messaging service unit ICQ on the block and had hired bankers Allen & Co. and Morgan Stanley to assist in the sales process.
According to the reports, AOL was looking to offload the asset for $300 million and talking to a pair of non-US companies about an acquisition (likely in a part cash, part stock transaction).
Question is: who are those potential buyers?
We’ve pinned down one who, sources say, has already engaged in late-stage negotiations with AOL about a buy-out that would occur after its planned December 2009 IPO: meet Naspers, a massive multinational media conglomerate that you’ve possibly never heard of.
Naspers (aka MIH Group) is a nearly century-old media company headquartered in Cape Town, South Africa that is listed on the Johannesburg Stock Exchange and also boasts an ADR listing on the London Stock Exchange. The group’s principal operations are in Internet platforms, pay-television and print media.
So what would make this a sensible move for Naspers?
Naspers’ principal Internet operations are currently in South Africa and elsewhere in sub-Saharan Africa, China, Russia, Eastern Europe, India, Brazil and Thailand. To expand its global footprint, buying ICQ would make sense as it already has stakes in a good number of complementary companies that operate on an international level.
An acquisition of ICQ, which has somewhere in between 40 and 50 million active users around the world – mainly in Germany, Russia, Ukraine and Israel – and is ‘moderately profitable’, would be a good move for the publicly listed media company to make in order to increase its international user base and create synergies between some of its ventures.
As outlined by Quintura CEO Yakov Sadchikov in a blog post speculating about Naspers’ interest in ICQ:
- the group owns a 35% stake in Tencent Holdings Limited, the operator of the wildly popular Chinese instant messaging platform QQ
- it boasts a 43% stake in Mail.ru, leading provider of internet and communication services for Russian speakers all over the world
- it holds 38% of Nimbuzz, a Netherlands-based global provider of instant-messaging and VoIP solutions for mobiles
– it has a 25% stake in global mobile advertising network operator BuzzCity (based in Singapore)
- it fully owns 24.com, one of the largest Internet publishers (offering blogs, email, social network and many other services) in Africa
– it recently acquired a majority interest in Brazil’s mobile services provider Compera nTime
- Naspers owns 100% of Gadu-Gadu, the leading Internet communications provider in Poland with further operations in Romania, Bulgaria and the Ukraine
- it has a 30% stake in MXIT, a mobile instant messaging service for South-Africans
- it’s the owner of Sanook!, Thailand’s no. 1 Web portal
The MIH Group also operates or owns a stake in a number of e-commerce platforms and auction websites, including Ricardo (mostly targeting Western European countries), Poland’s Allegro and Brazilian price comparison service BuscaPé, as well as local social networking sites like India’s Ibibo.
In other words, the group has been consistently building up quite a portfolio of multinational Internet and mobile communication properties, and picking up ICQ would fit perfectly into that expansion strategy.
According to our sources, Naspers was approached by AOL about a potential sale proactively, but is not the only corporation who might end up as the new parent company of ICQ. We reached out for confirmation or more information, but AOL declined to comment saying it doesn’t respond to rumors or speculation as a policy, and the MIH Group has not gotten back to us at this point. AOL is said to also be eying a sale of other properties, including MapQuest and Bebo.
AOL acquired ICQ (well, its then parent company Mirabilis) for $287 million in cash back in June 1998, with another $120 million in earn-outs for its executive team. Most of its 100-or-so employees are still located in Israel, where the company was originally established.
Stay tuned for more.
let see what happen
I didn’t knew ICQ still have so many users around the world.
And by the way, last month Naspers also acquired 91% of Buscape, for US$ 342 million. Buscape is the leading service for comparing prices in Brazil.
Added to the frey, thx .
40 – 50 million people still use ICQ?! don’t these people have Gmail, MSN, Skype, etc?
For example here in Czech Republic (neighbour of Germany):
ICQ is (regrettably) still the most used IM protocol, so you are in principle compelled to use it in order to communicate with others. But Skype’s usage and the count of Facebook users has been growing last few years. Live Messenger and Hotmail aren’t much popular here. Gmail is used more than Hotmail but is beaten by the two local providers (seznam.cz and centrum.cz), which have the vast majority of market share.
If anyone buys ICQ they should make it simular to Google Wave. Now that would be epic.
I have Gmail, Skype etc., but still use ICQ because EVERYONE IN RUSSIA use ICQ as primary IM network.
Yes, it’s not perfect with proprietary protocol, but how can I change mind of the whole country? Only about 5% in exUSSR knows what is MSN / Skype / Jabber.
How about a report on the CINCH system being premiered by DubLi? Certainly seems to be a better deal than ICQ, which is *so* 90s. Still, not a bad customer base after all this time…
ICQ has been great ten years ago. ICQ Lite -> slim and attractive client. But then, maybe 5..6 years ago ICQ stopped the support. Users are still able to ask in their official forums but that’s it. No answers since years. Then they started to put more and more stupid stuff in the client and never listened to what users requested. (reminds me of Google lol well at least ICQ *HAD* support)
But still… 300 million dollars sounds absurd.
brilliant move, in 5 years they have chat and voip world dominion!!!
Haha I’ve only heard of Gadu-Gadu because of it being an option in Adium.
Good for ICQ though, I have fond memories of meeting girls through there before online dating was really acceptable (and before it became a haven for random spammers)
Maybe my low ICQ number will be worth some money on eBay again
I can not see any logic in Naspers buying ICQ. ICQ is an old and people are using faster new means of communication. The only useful thing for ICQ is to hide bots messages.
Naspers is a great example of how traditional newspapers can embrace and make a success of the new world of communications. Rupert Murdoch can go and take some lessons there.
Murdoch couldn’t survive in Cape Town. The lax would probably make his head explode.
Tencent is the buyer, so simple
Great article, Robin! Please let us know when you figure out the second company, and get more confirmation on everything.
Thanks!
I wonder what this will mean for interoperability of IM services? ICQ moved over to the same protocols and servers as the AIM service years ago, and its possible to IM between the two services. While AOL has talked about interop but never really done much, I wonder what the implications would be for a new owner? Would the new company ‘own’ ICQ but not be in charge of major technical decisions like whether or not to build true and easy to use IM interoperability with the other major IM services like MSN Messenger and Y!IM?
>> I wonder what this will mean for
>> interoperability of IM services
Nothing. There won’t be a change until users really ask for it.
The networks still want to play their own game. There is still only ONE cooperation: MSN+YAHOO. And it’s only text messaging. No file transfers, no web cam support and not even voice chat. Stupid.
AIM+ICQ doesn’t count cuz it’s both AOL.
And then Google Talk + AIM isn’t a real cooperation AIM because they just use some cheap XMPP transport. Every XMPP server can do that.
So it’s really one cooperation -> MSN+Yahoo.
Unbelievable. More than 10 years IM and no change at all
The idiots should wake up and open ALL their networks. AIM, ICQ, MSN, Yahoo, QQ, GG…
E.g. Yahoo
***********
Wonderful looking client. Great camera support. BUT users have to sign up for a stupid JohnDoe66666666@yahoo.com mail address. How lame is that? Even Microsoft has this passport service. Users are able to use their existing mail address.
If they would all open their networks, users only have to decide between the software clients. What’s the best client with the most features? …
Right now, people have to decide between networks AND clients. Funny, if you have 80% MSN “friends”, 10% Yahoo “friends” and 10% QQ “friends” and you want to exchange files and use your 200 bucks web cam. No way. Multi Network Messengers still suck cause no native cam and voice support, file transfers only work once in a while..
So, only solution 3 software clients which is NO solution at all
Well, but it’s what most of the users want…
Not!
that’s already possible using aggregators as meebo, fring and ebuddy,…
That’s not possible using any third party application. Tell me how to do native video and voice chat in Meebo and eBuddy? No way? Right. Tell me how to do real file transfer inside of Meebo… no way? Right.
fring it?!
Not to be a nitpick, but I’d like to correct you on MXIT. They’ve hit 14 million users across 3 continents: http://www.itnewsafrica.com/?p=2881
Them people and their mobiles. Oi.
Mail.ru is not an Internet provider.
Interesting idea of NASPERS / MIH buying some stake in ICQ. It’s also interesting to see that ICQ is likely to be valuated at $300 mln while Tencent in China – which started off as a “Chinese ICQ” is worth today over $34 BILLION (i.e. 100 times ICQ – more than eBay’s valuation and close to Time-Warner’s). It had revenue in 2008 >$1 billion, for a net profit margin over 40%. Maybe buying ICQ and splitting its operations by country / region would work (especially since MIH has a strong stake in Mail.ru).
Disclosure: NASPERS / MIH Group is a client of ours.
Don’t forget: QQ always cared for their users. They developed a wonderful IM software, webmail and all this stuff. ICQ gives a s… on their users.
I guess that makes the price 