Private Completes GameLink Purchase

Jan 22, 2009 12:30 PM PST
BARCELONA — With Private Media Group’s announcement on Thursday that it completed its acquisition of online retailer GameLink, a much bolder company has emerged — one that has ambitious plans on offering more content in more media formats and in more languages.

First off, the company plans a global roll out of the GameLink VOD portal and a relaunch of with enhanced functionality, expanded international content licensing deals and increased off-portal mobile content delivery.

The company also has formed a new unit, Private Online Media, which will focus on the U.S. and E.U. markets and be helmed by former GameLink CEO Ilan Bunimovitz, who will take the title of executive vice president of the division.

Private COO Peter T. Cohen said that the company has been focusing business growth on new media platform distribution with customized targeted content offerings and that GameLink deal was a natural fit for the Barcelona-based company.

Cohen also hinted that the deal with an established adult player helps the company have “shorter time-to-market on new initiatives” and gives the ability for Private to “maximize monetization of content on high-margin platforms.”

“The addition of GameLink's successful VOD portal, along with its state-of- the-art development capabilities for platform design, interactive functionality and user profiling, will greatly enhance our global business model and ability to implement our online initiatives more timely and effectively,” he said.

Bunimovitz, who founded San Francisco-based GameLink in 1993, said that the new, “much stronger business model” not only allows for more robust branding and a broader reach into international online markets, but it also will create a one-stop digital aggregation and distribution solution.

“The combined entity will offer more content in more media formats, localized for more countries, than any other company has ever achieve,” he said. “In addition, we will extend our first-class platform to other adult and mainstream content providers and resellers.”

Private delivers adult content through a wide range of platforms including mobile telephone handsets via 85 network operators in 36 countries, IPTV via 35 platforms in 18 countries, Internet, TV, DVDs and magazines.

GameLink delivers VOD through its website. The site's installed user base represents more than 1 million customers and it serves more than 10,000 users daily. It has one of the largest libraries of adult media with 60,000 video titles that streams over the Internet and on platforms such as the iPhone. It also sells sex toys and novelties on its site.

GameLink's infrastructure is customizable and scalable designed to support multiple retail strategies and products simultaneously. It also offers third-party and white-label ecommerce solutions and development.

Gamelink has about 70 employees, while Private has 110.

The combined revenue of both companies for the nine months ending Sept. 30 was $35.3 million compared to $22.7 million in revenue for the same period for Private.

In November, Private announced it executed a binding letter of intent to buy Gamelink in an all-stock deal. The acquisition agreement called for the issuance of 8.5 million shares of Private stock to owners of GameLink and related companies, with an additional 4.5 million shares of Private common stock based on earn-out targets.

On Wednesday, Private shares traded at 96 cents on the Nasdaq.

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