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New York Times Buys About.com for $410 Million

Posted by Zonk on from the expensive-searching dept.

IAmTheDave writes "Reuters has the story that the New York Times Co. is set to purchase About.com for $410M from Primedia, Inc. The high purchase price is due to increased ad revenue, up 30% from last year." From the article: "Phillips pointed out that Internet companies have started trading again at significantly higher multiples, and said The Times Co. would be able to use ad revenue from About.com to make up for the flagging classified ad sales that have plagued the industry." Commentary also available at The Chicago Tribune, The Guardian, and CNN Money.

4 of 146 comments (clear)

  1. Re:Oooooh .... by elecngnr · · Score: 4, Insightful

    No doubt. I tried a link to that site one time doing a little research on something. It was 99% ads, 0.99% whitespace, and 0.01% information--and I use the term information liberally here. Some of the articles themselves are unabashed ads.

    --
    Having done so much with so little for so long, I now can do anything with nothing at all.
  2. So the newspaper you prefer is....? by Infonaut · · Score: 4, Insightful
    I'm dying to know what daily newspaper in the United States provides as much depth and breadth of coverage as the NYT without running afoul of your political orientation.

    --
    Read the EFF's Fair Use FAQ
  3. Idiots by pHatidic · · Score: 4, Insightful

    I want to go on record saying this is going to be a horrible move for the Times. Please mod this comment up so that five years from now if anyone sees this comment then I look like a genius for predicting the future.

  4. This move makes sense... by William_Lee · · Score: 3, Insightful

    Did they overpay? Yeah, probably in the short term, but let's look at the situation...

    While the deal was certainly rich by price to cashflow and cash to revenue metrics, there are a limited number of these internet spaces for sale. CBSmarketwatch.com just went for over $500 million as a comparison.

    The NY Times currently has a market cap of around $5.4 billion. They expect this deal to be accretive to earnings two years out. It doesn't represent an enormous purchase, just a pricey one by many measures.

    The ad market for printed newspapers has been flat. Growth is expected to be anemic this year.

    Newspaper circulations in general are down.

    They picked up approximately 22 million unique eyeballs a month to target ads to via this deal, and a high traffic established internet site. The internet advertising market is growing.

    Digitial media / advertising is a growth industry compared to the lackluster printed newspaper market that is unlikely to get better any time soon.

    Traditional media outlets like the NYT need to continue to build internet presences to avoid obsolesence.

    The deal while a bit expensive makes a whole lot of sense to stay competitive as media evolves and changes.