Blogs Valued Less Than Traditional Media Properties
A new post from BreakingViews asks why blogs have not been acquisition targets to-date. While sites like Gawker and the Huffington Post are growing at a great clip and offer high-valued demographics, they've not become M&A targets for traditional media companies. The only significant blog acquisition to date was AOL's purchase of Jason Calacanis' Weblogs, Inc. more than two years ago.
BreakingViews suggests three reasons for this:
- Difficulty in valuing potential revenues from blogs and a low barrier to entry;
- The close tie between a blog and its author; and
- The inconsistent reader patterns that mean this week's blogosphere darling may be next week's old news
The low barrier to entry applies to most publishing businesses, both online and off. While it may be possible to spend $100 million to launch a new magazine (Conde Nast Portfolio), it's not the recommended approach and most magazines, especially trade mags, are launched with modest budgets.
I agree that with typical blogs it's hard to separate the blog from the blogger. TechCrunch without Arrington or GigaOM minus Om Malik (for an extended period of time) would likely flounder. But, you could make the same argument about some traditional media properties (until Martha Stewart got released from prison, her media properties drifted). More importantly, that model is changing. While many blogs remain simply the personal web log of an individual, many new publishing businesses are being built on a blog platform. I'd argue that PaidContent would remain viable were Rafat to step aside just as the HuffPost could continue without Arianna and the Weblogs blogs did fine after Jason stepped down.
If I were a journalism grad looking to break into publishing today, I'd probably start a blog or join an existing blog rather than navigating the bureaucracy of a traditional publisher. As more people follow that path, blogs will become a dominant form of content delivery. So I disagree with the BreakingViews position and think that targeted blog acquisition should be a key strategy element for publishers seeking to expand their online presence.
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