By editorial@silicon.com, 7 March 2001 16:07
NEWS The terrestrial broadcaster was the first company to engage in an 'equity for airtime' deal when it took a stake worth £1.2m in Rapid Insure in March last year. As part of this latest agreement, the terminally positive Channel 5 will take between a five and 10 per cent stake in the online pet product company. However, like-minded UK broadcasters that supplied free airtime for stakes in dot-coms are now finding themselves sitting on losses. A prime example is BskyB, which gave up valuable airtime for a £10m stake in Letsbuyit.com last April. No amount of primetime advertising could save the dot-com from avoiding bankruptcy by the skin of its teeth late last year after it ran out of capital. The online company recently began trading again after receiving an injection of E52m (£33m) from a consortium of investors to bring it back to some semblance of fluidity. It remains unclear what Channel 5's plans are for the future in terms of 'equity for advertising'. The broadcaster announced in January that it hoped to strike five such deals this year, and while the Petspyjamas.com transaction sees it making good on some its promise, whether it is the wisest channel for investment is questionable.
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