Case | HBS Case Collection | February 2010 (Revised August 2010)

Digital Media Group: The Shanghai Bid

by G. Felda Hardymon and Ann Leamon

Abstract

In December 2008, Thomas G. Tsao, acting CEO of Digital Media Group (DMG), a venture-backed provider of technology and media used primarily in subways, must decide how to structure the company's bid for the advertising concession in Shanghai's 13 existing and planned subway lines. This is complicated by the fact that he is also a general partner in Gobi Partners, one of DMG's largest investors. The company is bidding against its largest competitor, which also investigated acquiring DMG a few months before. DMG has very little cash, and the publicly traded competitor knows it. How does Tom structure the bid? How does he get the money for it? How does he manage the company, given its inability to attract a CEO and his firm's need to have an exit? Lastly, how does he manage his responsibilities—to his firm, his limited partners, his coinvestors, and the company?

Keywords: Advertising; Entrepreneurship; Venture Capital; Corporate Accountability; Business or Company Management; Bids and Bidding; Business and Stakeholder Relations; Competitive Strategy; Advertising Industry; Technology Industry; Shanghai;

Citation:

Hardymon, G. Felda, and Ann Leamon. "Digital Media Group: The Shanghai Bid." Harvard Business School Case 810-099, February 2010. (Revised August 2010.)