Despite continuing economic challenges posed by the financial markets, high oil and gas prices, and early warning signs of inflationary pressures, the M&A market for the sectors that JEGI serves – mid-market media, information, marketing services and related technologies – continues at a vibrant pace, especially in the middle-market, for high-quality growth businesses. Deal announcements in the first half of 2008 surpassed the record-setting performance of 2007, with 404 transactions, totaling more than $23 billion in value.

Highlighting the continued strength of the middle-market, JEGI closed 11 noteworthy transactions in the first six months of the year, bringing our total to over 30 transactions in the past 18 months. Our pipeline of deal flow remains stable, and we expect the ongoing retooling of legacy media companies to continue stimulating consolidation among, and acquisitions by, large and mid-tier diversified media groups.

Helping to drive M&A volume in JEGI’s markets was continued strong activity in the Online Media & Technology and Marketing Services sectors, which combined for 290 M&A transactions in the first half of the year. In the “State of Interactive M&A” article in this issue of the Client Briefing, we highlight the growth in Interactive M&A being driven by the continued strong growth in online advertising revenue – up 18.2% in the first quarter of 2008.

The Database & Information sector also saw robust M&A activity in the first half of 2008, with 18 deals announced, accounting for more than $7 billion in value. As noted in the Client Briefing’s article “Modeling for Success with Business Information”, business information products increasingly drive revenue and growth for B2B publishers and also improve enterprise valuations. As a result, global strategic information companies – Dow Jones, The Hearst Corporation, Reed Elsevier, and ThomsonReuters, among others – have been actively acquiring companies in this sector.

Another strong indicator of vibrancy in JEGI’s core markets is the continued level of interest in investment opportunities by many of the leading venture capital firms, which are focusing on: 1) a broadband connected world, where all device applications live “in the cloud”; 2) behaviorally-targeted advertising, for delivery of the most effective display and text advertising to end users; 3) the continued growth of digital living in everyday life; and 4) software and web applications that take advantage of inexpensive on-demand computing and infrastructure. Additionally, all venture capital investors who spoke with JEGI agree that exit via M&A is the likely outcome in current market conditions and that “buying start-ups is so essential to big companies that M&A will continue to flourish.”

On the economic front, data has been mixed recently. While the Dow Jones Industrial Average fell below 11,500 in late June, first-quarter GDP grew 1.0%, according to the final estimate released by the Commerce Department, and a similar performance is estimated in the second quarter of 2008. Maintenance of positive GDP growth in recent quarters actually is remarkable, in view of the strong headwinds that are buffeting the U.S. economy. Furthermore, the US Manufacturing Index showed surprising strength in June.

In its second quarter report, the UCLA Anderson Forecast affirms its “no recession” stance, while acknowledging that an increase in the unemployment rate from 5.0% to 5.5% falls within “recession range.” Nonetheless, citing concerns about possible inflation, the Fed left its key short-term interest rate unchanged at 2% at its June 25 meeting, marking the first time it held rates steady in the past nine months. The move comes at a time when many economists are focusing more on inflation than on an economic slowdown, and some are predicting that the Fed will need to start raising interest rates soon, in order to keep rising prices in check.

In its statement, the Fed said it expects inflation pressures to ease later this year, but cautioned about the upward pressure on prices caused by rising oil and other commodity prices. It seems as though the economy will continue to face formidable difficulties as the year proceeds, although both monetary and fiscal policy most likely will be providing crucial support to the system.

On a separate front, we are proud to announce that JEGI has teamed together with The Society of Independent Show Organizers (SISO) and Tradeshow Week on the second annual Tradeshow Web Site Awards and Survey, with results and winners to be announced at the SISO Executive Conference, to be held August 4-6 in Atlanta. For more information, visit: www.siso.org/08exec.html.

JEGI is also teaming up with Outsell, a leading market research provider to the information industry, to produce the second annual Signature Event, which is titled “Driving Innovation: Essential Actions.” It is being held September 21-23 at the world-class Ritz Carlton, Half Moon Bay in San Francisco. The event is the only global conference convening CEOs, COOs, Presidents, and Managing Directors to discuss innovation and the key long-term issues facing the industry. The event will be highly interactive, with ample time set aside for networking. For more information: www.jegi.com/announcement/2008OutsellSignatureEvent.html.

Please enjoy this edition of the Client Briefing, and feel free to contact our Managing Directors or me with any questions regarding the marketplace and/or our services..

Best Regards,



Wilma H. Jordan
Chief Executive Officer