We already know the IPO market is nonexistent, but what about M&A? A report put out Tuesday by media-related investment banking firm the Jordan, Edmiston Group Inc. indicates that things aren't so bad in the online media and technology sector and the marketing and interactive services sector, though deal sizes have declined significantly.

According to the report, the total number of transactions for media, information, marketing services and related technologies increased to 404 in the first half of 2008 versus 397 in 2007. Deal value, however, was down dramatically to $23.2 billion from $65.8 billion in 2007.

The decline was most noticeable in $1 billion-plus transactions. There were four in the first half of 2008, accounting for $9.6 billion in value, versus 11 deals worth $46.3 billion in the same period last year, though a sizable amount of that came from Thomson Corp.'s $18 billion acquisition of Reuters.

But the report shows that the demand for high-quality, innovative companies continues at a brisk pace, as diversified media and marketing groups, major technology companies and private equity investors continue to retool the media and marketing services industries. There were 146 transactions in the first half of the year in the online media and technology sector and 144 in marketing and interactive services; this represents a 20% increase over 2007 levels. The 290 transactions accounted for 72% of the total deal volume for 2008.

Among the highlights of the first half of the year were Reed Elsevier plc's $4.1 billion acquisition of business services company ChoicePoint Inc. [CPS], Hellman & Friedman's $2.4 billion acquisition of photo archiving firm Getty Images, CBS Corp.'s $1.7 billion acquisition of Cnet Networks Inc. and AOL LLC's $850 million acquisition of social networking firm Bebo.

The report does not, however, lament the one fish that got away --  Yahoo! Inc. [YHOO], which has successfully avoided being caught by Microsoft Corp. [MSFT], a $40 billion-plus acquisition that would have significantly skewed the numbers. - David Shabelman

See first half of 2008 M&A report from the Jordan, Edmiston Group
See July 1 post on weak IPO market from Tech Confidential