I’ve been getting emails, calls and IMs about this all day and I’m really busy, so to make things easier for everyone in the press here are my thoughts:
Bottom line: The NYT buying About.com is like a contractor/designer buying a fixer upper house: they have skill the turn it into something great in a short period of time and either flip it again or own a really great house.
This is a great move for a number of reasons:
1. The New York Times has an amazing sales team that frequently sells out their inventory, and About.com has much more inventory that they don’t seem to sell outa match made in heaven! Right now 1/3rd of our sponsors buy more then one of our blogs, and I’m sure the New York Times has a similar result. The cost of closing a sale for one blog or 100 blogs is the same, but the benefit for closing 100 is, well, 100x greater.
2. New York Times Digital doesn’t get a lot of credit for what they are doing and has been looked at as not very grass-roots/net-centric. This gives NYT grass roots exposure and helps them dive into the more wild side of the Internetnot that wild, but little more wild.
3. Primedia wasn’t able to integrate the About.com brand into their publications, so this sounds like a great move on their party to get out of a failed, three-year integration.
4. The New York Times paid 10x revenue and my guess is 50-100x EBIDA. This is not uncommon for a brand which the New York Times will be able to really boost. I’m sure the New York Times can cut 10-20% of the expense base and double or triple About.com’s sales in a short period of time. If they double the sales next year, and increase the EBIDA they could own the brand free and clear in 7-20 years.
Congrats to Martin for pulling this off this will be looked at as the moment the New York Times because a major player in the Internet industry. Yahoo, Google, AOL, and Microsoft are the real losers here, I’m shocked they let About.com slip away given what their base of users and advertisers could have done for the About.com brand.
It’s a coup for NYT.
1. Rafat’s PaidContent has an interview with Martin upthat Rafat, he’s one smart cookie!
2. Fred Wilson: the NY Times is constructing something that I think is very powerful in the emerging digitial world we are living in. It’s a network where creativity and advertising happen both centrally and on the egdes.
3. Alan Meckler: Think back to the mid-1990s. It would have been hard to believe then that old line organizations such as The Washington Post, The New York Times and Dow Jones would be making purchases of Web sites.