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Last updated: November 2, 2005 4:44 pm

IVillage considers putting itself up for sale

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IVillage, a company based in New York that owns websites aimed at women and identifies itself as a top “women’s community site”, is considering a sale that could value it in excess of $700m.

The move comes as traditional media companies such as News Corp and Viacom are stepping up efforts to expand their presence among internet users. This is prompting many investment bankers to advise potential targets in the industry to ponder sales at attractive valuations.

IVillage consists of several online properties aimed at women, teenage girls and parents including iVillage.com, Women.com, Ast-rology.com and gURL.com.

On Tuesday, iVillage featured a guide to naming babies, news about flu vaccines, as well as details of the planned wedding of Hollywood celebrities Cameron Diaz and Justin Timberlake.

The company, which has hired investment bankers at JPMorgan Chase to explore its options, has a market capitalisation of about $540m. Adding on a takeover premium, a sale to a media company could generate as much as $700m.

In a sign of the contrast between the attractiveness of new media outlets and the troubles experienced by more traditional sources of information, the largest shareholder in Knight Ridder on Tuesday demanded in a letter to the company’s directors that they sell the newspaper chain because of its poor share performance.

The move highlighted the profit pressures on newspapers, which are losing readers and advertisers to the internet, and pushed up Knight Ridder’s shares by more than 8 per cent.

This year has seen a spate of internet acquisitions by media groups.

News Corp, for example, has already spent nearly $1.5bn on purchases such
as community website MySpace.com and gaming company IGN Entertainment. It has said it could buy more properties.

Rupert Murdoch, chairman and chief executive of News Corp, has put internet expansion at the top of his agenda as advertising dollars increasingly shift to web audiences.

Both News Corp and Viacom are expected to be among the companies that would be approached to buy iVillage. However, internet companies are also trying to expand their reach and acquire content, so they could also be interested in the group.

IVillage, which has financial results coming out next week, declined to comment.

It was barely profitable last year, earning $2.75m in net income from sales of $66.9m. The company was established in 1995 and has made acquisitions recently to expand. on Tuesday, its Nasdaq-listed shares closed up 2.5 per cent at $7.53.

Additional reporting by Joshua Chaffin in New York

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