GE launches $250 million media fund
NEW YORK (Reuters) - General Electric Co. (GE.N) is launching a $250 million equity fund to invest in media and technology companies, an executive said on Monday, part of a broader push by traditional media companies to get into hot areas such as digital advertising or social networks.
Adify, a company whose technology helps build and support online ad networks, received the first $3 million investment announced by the fund, which is overseen by NBC Universal and GE Media, Communications and Entertainment. NBC Universal is 80 percent owned by GE and 20 percent by Vivendi (VIV.PA).
Other investments by the fund will focus on companies developing technologies or businesses that NBC Universal can use in building its digital business, said Beth Comstock, NBC Universal's president of integrated media.
The companies would most likely be involved in areas such as advertising services, wireless or digital content, she said in an interview.
"It basically is a way for us to invest in smart companies where we see a strategic value and companies that have a high- growth potential, particularly in the digital media space," Comstock said.
The fund, which has been under discussion for about six months, will target investments ranging from about $3 million to $15 million each.
"I would imagine we will be investing with some sort of regularity. Certainly every quarter," Comstock said.
She said the fund would chiefly invest in areas that could help NBC Universal's digital business.
"This is about investing in companies where we see a strategic value. Companies where we will be able to put to use some of their great technology," she said. "In some cases, we may just make investments, but more than likely they will be investments with some sort of strategic or operational value."
Adify, meanwhile, received the $3 million as part of a broader round of financing that raised $19 million.
Based in San Bruno, California, Adify makes technology used to create online ad networks with automated management, tracking, reporting, billing and payment systems. The company was founded in 2005.
"We like their capability, they are very smart, and we like their technology," said Comstock.
Apart from the investment by the GE fund, Adify secured funding from US Venture Partners, Venrock Associates and Time Warner Investments.
"Any traditional media company is looking for ways to grow their importance with their advertising base online," Adify Chief Executive Russell Fradin told Reuters. "If anything we believe traditional media has a spectacular array of assets, but they need a handful of additional tools to continue growing online."
Recently, all areas of online advertising have been attracting attention, given the sharp growth rates of marketing money moving online.
Google, for instance, announced plans on Friday to purchase privately held DoubleClick, an early leader in the online advertising market. Among the other names that surfaced as potential buyers are Microsoft Corp. (MSFT.O), Yahoo Inc. (YHOO.O) and Time Warner Inc. (TWX.N)