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Shockwave.com is adding some video voltage to its online content portfolio with the acquisition of leading online cinema site AtomFilms.
The Macromedia subsidiary, which was created as a content outlet for the Shockwave animation player and format, is acquiring AtomFilms in a stock deal. Upon closing some time in the first quarter, AtomFilms investors will own 30 percent of the merged company.
Michael Yanover, Shockwave's senior vice president of entertainment, says the merger gives his company syndicated video revenue, its relationships with video content providers and a key European marketing presence through AtomFilms' United Kingdom sales office. AtomFilms, meanwhile, gains access to shockwave.com's 10 million unique viewers per month and a foothold in Asia via its portal site recently opened in Japan.
"It builds them as a destination site and it builds Shockwave as a global generating engine," he says.
"The synergies are amazing," agrees Scott Roesch, AtomFilms' director of Web entertainment. He says shockwave.com's traffic and gaming properties are "very attractive to us. I am excited about bringing together what we have to offer with what Shockwave has to offer."
With an animation format and player aimed at fast delivery using slow, dialup-type connections, Shockwave.com has catered primarily to the narrowband world. Gaining AtomFilms will give it a broadband presence, as well as moving AtomFilms into a narrowband sphere.
"When it comes to broadband we are all struggling with it and trying to decide when it will open up in a big way," Yanover says. "I think we are in a good position now so when it does open up, we will be in lockstep to move forward."
Combining AtomFilm's video properties with Shockwave's animation and game portfolio also will create a more complete content play at a time online content is suffering through a lethal market shakeout. Roesch is quick to point out merger talks between the two companies began before the market slide, but he acknowledges the outcome benefits both operations now.
"It is a bad market - there is no secret about that," says he. "We are always looking for ways to strengthen the business. It just has made a lot of sense in a lot of ways."
Roesch also thinks the melding of AtomFilms and Shockwave.com will not be the only merger in the coming months. "It signals to the industry that other companies should be looking at consolidation, and there are certainly rumblings of other deals," he says.
Macromedia chairman Rob Burgess will become chairman of the new company, while AtomFilms founder and CEO Mika Salmi will become the CEO. The company also gets a new name, although the respective Web sites will continue with their original monikers.
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