Axel Springer, which already holds a 9% stake in Business Insider, said in a statement it had agreed to buy a further 88% share for €306 million. While the announced price of $343 million is technically accurate, it represents a few accounting finesse. Perhaps Business Insider’s sale will prompt a few of these other talks to resume.
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Springer says Blodget and Julie Hansen, Business Insider’s chief operating officer, will stay with the company and have “extensive, long-term equity incentive” to stick around.
Their timing is now rewarded, but their challenges are numerous.
“There’s no way to rationalize that [price] based on the revenue”, said Martin Nisenholtz, a consultant and Columbia University professor that started the New York Times’ digital operation, then referring to an even more astronomical valuation of $560 million. While the business niche is an above-average one, hyper-competition and even the recent disruption of ad blockers, spell continuous need for adaptation.
The acquisition is part of Axel Springer’s efforts to increase its digital coverage worldwide and expand its journalistic portfolio in English-speaking countries. With one billion English speakers on the globe, English-language media lead the way. Digital business doesn’t reward also-rans, and that often means third-place players and lower.
With its purely digital business model and focus on millennials, the sought-after target audience of 18 to 34-year-olds, Business Insider is a pioneer among business news portals. The same practice will expand Business Insider’s reach and turn it into a global brand. Back in 2011, AOL bought the Huffington Post for more than $300 million; four years later, it still seems clear that corporate behemoths are interesting in buying up online-media properties for massive and ever-growing amounts of money – as long as said companies are also drowning in clicks.
In April of this year, Refinery29 raised $50 million from Scripps Interactive Network and WPP to fund its global expansion, in a round of investment that valued the publisher at $290 million.
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Both of those companies have had their suitors, though.
