According to TechCrunch, Twitter is being valued at $1 billion. Meanwhile, one valuation for BusinessWeek came in at $1.00.
Could there really be such a huge gap between the two properties? BusinessWeek reporter Stephen Baker mused about this in his blog posting, "Could Twitter be worth one billion BusinessWeeks?"
Since Twitter has no revenue model in place, it's easy to consider that we're back in the dot-com bubble days. AOL was once considered to be much more valuable than Time Magazine. Does anybody remember AOL?
I like Twitter, and it's certainly generating load of coverage -- Jay Leno mentioned it at least three times during last night's show. But I have to wonder how much can Twitter be worth when the site generates no revenue.
Do you think Twitter is worth $1B? Do you think BusinessWeek is worth $1.00? Let me know.
Showing posts with label McGraw-Hill. Show all posts
Showing posts with label McGraw-Hill. Show all posts
Thursday, September 17, 2009
Monday, September 14, 2009
Understanding BusinessWeek
BusinessWeek, which seems to be overpaying on the rent it pays to parent McGraw-Hill (to the tune of $26 million in charges like overhead and rent, according to the Times), is facing significant challenges. As the deadline for a possible bid approaches, I thought it worthwhile to provide some context to BusinessWeek, some of it gleaned from a New York Times article, "BusinessWeek, on the Block and Ailing."
From a business perspective, BusinessWeek is losing money, even without the overpayment to McGraw-Hill.
According to the Times, ad revenue for BusinessWeek dropped to "an estimated $60 million this year, from almost $110 million in 2006." Meanwhile, its website has been doing very well in generating traffic, yet web-based ad revenue increased by less than a million to an estimated $20.5 million this year.
To understand the gap between web traffic and web revenues, it's important to understand this:
45 percent of pages views of BusinessWeek.com are from slide shows. Apparently, slide shows are considered to be gimmicky. (That may be, but as I wrote earlier today, Using The Power of Multimedia to Make a Point -- Will this be the new journalism?, such gimmicks actually take advantage of the Internet so perhaps that mindset will change.)
In fact, only 16 percent of page views came from original articles, and BusinessWeek.com pulls in just $19.28 per thousand ad views, almost a quarter lower than what it was earning three years ago. And it sells only about 38 percent of the available ads, down from 79 percent in 2006, according to a document cited by the Times.
What this means is that, despite six companies interested in bidding on BusinessWeek, its long-term prospects are not great. BusinessWeek seems to have fixed its journalism model, but it still needs to solve its business model.
- BusinessWeek founding missions was to summarize the week’s business news. It soon became a handbook for managers, covering strategy, marketing and the big issues affecting business, like policy, energy and debt.
- In Feb. 2009, BusinessWeek updated its mission: to focus on what executives needed to know for their jobs -- business leaders, and not consumers. In so doing, the magazine droped "sports, lifestyle and politics articles." According to a mission statement unveiled then, “Our mission is to move business forward....(and to help readers) make smarter decisions in their businesses, careers and investments.”
- However, to succeed,“They have to be unique, must-read,” Stephen B. Shepard, who had served as editor of BusinessWeek for 20 years and is now dean of the Graduate School of Journalism at the City University of New York.
From a business perspective, BusinessWeek is losing money, even without the overpayment to McGraw-Hill.
According to the Times, ad revenue for BusinessWeek dropped to "an estimated $60 million this year, from almost $110 million in 2006." Meanwhile, its website has been doing very well in generating traffic, yet web-based ad revenue increased by less than a million to an estimated $20.5 million this year.
To understand the gap between web traffic and web revenues, it's important to understand this:
45 percent of pages views of BusinessWeek.com are from slide shows. Apparently, slide shows are considered to be gimmicky. (That may be, but as I wrote earlier today, Using The Power of Multimedia to Make a Point -- Will this be the new journalism?, such gimmicks actually take advantage of the Internet so perhaps that mindset will change.)
In fact, only 16 percent of page views came from original articles, and BusinessWeek.com pulls in just $19.28 per thousand ad views, almost a quarter lower than what it was earning three years ago. And it sells only about 38 percent of the available ads, down from 79 percent in 2006, according to a document cited by the Times.
What this means is that, despite six companies interested in bidding on BusinessWeek, its long-term prospects are not great. BusinessWeek seems to have fixed its journalism model, but it still needs to solve its business model.
Wednesday, July 22, 2009
Can This Business Model be Saved? Thoughts on BusinessWeek & the 5 Percent Problem
The news that McGraw-Hill has put BusinessWeek, the prestigious magazine it has owned for 80 years and that has a paid circulation of 900,000 that has held steady over the past few years, is a sign that we still have a way to go before a recovery.
But the news has also generated an interesting look by Stephen Baker, a 22-year BW veteran, to ponder, "How to remake BusinessWeek."
In trying to figure out "how to turn a business news operation built primarily as a weekly magazine into a profitable franchise for the age of near ubiquitous and real-time information," Baker refers to the "the last 5%."
According to Baker, "It involves a large team of professionals engaged in tweaking, polishing, compressing and dressing articles--hopefully giving them the gleam, smarts and clarity of a top-rate product...This last 5% consumes a sizeable effort and expense. The question the next (or current) owner of BusinessWeek is going to have to grapple with is whether such attention to detail is worth it, or, alternatively, whether there's another way to achieve the same goal."
From Baker's perspective, "the last 5%" is a significant problem. Yet the work that gets done during "the last 5%" is also what separates BusinessWeek from commodity journalism.
Having worked as an editor in newspapers and book publishing, and in PR, I know that there's a lot of effort to get the final product to be right, paying attention to commas, hyphens and other grammatical minutiae that most people will overlook as they scan the page. There's a pride of ownership in a final document and a sense of responsibility to get it right.
Baker suggests that may no longer be necessary in a real-time, social media space. After all, as noted before in this blog, there are a lot of people who consider speed to publish is more important than accuracy. That would include, but is not limited to, grammatical accuracy, too.
I think Baker's right that "the last 5%" consumes more energy than the reader may value. But I don't think that's the only problem facing the traditional print business model. The problem also can be attributed to a lack of accountability in how newspapers and magazine spent their money.
In another blog post, "After the Madison Avenue bubble," Baker wrote about how BusinessWeek overspent when he first joined the magazine: requesting and paying for an additional apartment in Mexico City so the magazine could claim to have a bureau office there, along with a secretary -- when Baker could have just worked at his own (subsidized-by-BW apartment). How he lived well in Paris (in another expensive, subsidized-by-BW apartment), sent his kids to subsidized-by-BW private school, etc.
From my perspective, people still want news, still want content that requires the effort of "the last 5%" -- that demand for news has nothing to do with the actual business model. The real problem is the debt many built up and now can't service. Bankruptcy may help some publishers restart their business, by reducing their debt loads.
But it may be too late to stem the tide, to save print media from itself.
But the news has also generated an interesting look by Stephen Baker, a 22-year BW veteran, to ponder, "How to remake BusinessWeek."
In trying to figure out "how to turn a business news operation built primarily as a weekly magazine into a profitable franchise for the age of near ubiquitous and real-time information," Baker refers to the "the last 5%."
According to Baker, "It involves a large team of professionals engaged in tweaking, polishing, compressing and dressing articles--hopefully giving them the gleam, smarts and clarity of a top-rate product...This last 5% consumes a sizeable effort and expense. The question the next (or current) owner of BusinessWeek is going to have to grapple with is whether such attention to detail is worth it, or, alternatively, whether there's another way to achieve the same goal."
From Baker's perspective, "the last 5%" is a significant problem. Yet the work that gets done during "the last 5%" is also what separates BusinessWeek from commodity journalism.
Having worked as an editor in newspapers and book publishing, and in PR, I know that there's a lot of effort to get the final product to be right, paying attention to commas, hyphens and other grammatical minutiae that most people will overlook as they scan the page. There's a pride of ownership in a final document and a sense of responsibility to get it right.
Baker suggests that may no longer be necessary in a real-time, social media space. After all, as noted before in this blog, there are a lot of people who consider speed to publish is more important than accuracy. That would include, but is not limited to, grammatical accuracy, too.
I think Baker's right that "the last 5%" consumes more energy than the reader may value. But I don't think that's the only problem facing the traditional print business model. The problem also can be attributed to a lack of accountability in how newspapers and magazine spent their money.
In another blog post, "After the Madison Avenue bubble," Baker wrote about how BusinessWeek overspent when he first joined the magazine: requesting and paying for an additional apartment in Mexico City so the magazine could claim to have a bureau office there, along with a secretary -- when Baker could have just worked at his own (subsidized-by-BW apartment). How he lived well in Paris (in another expensive, subsidized-by-BW apartment), sent his kids to subsidized-by-BW private school, etc.
From my perspective, people still want news, still want content that requires the effort of "the last 5%" -- that demand for news has nothing to do with the actual business model. The real problem is the debt many built up and now can't service. Bankruptcy may help some publishers restart their business, by reducing their debt loads.
But it may be too late to stem the tide, to save print media from itself.
Tuesday, July 14, 2009
What The Selling of BusinessWeek Tells Us about the Economy -- That BusinessWeek Hasn't Told Us
The news that McGraw-Hill is trying to sell BusinessWeek, "McGraw-Hill Is Said to Be Seeking a Buyer for BusinessWeek," tells us something imporant about the media business -- something that you won't find inside the pages (hardcopy or otherwise) of BusinessWeek itself.
It's that the Great Recession has not started rebounding.
Circulation for BusinessWeek is holding steady at about 900,000, but advertising is declining.
BusinessWeek is a great publication, does a terrific job covering news and trends. And its website and BusinessWeek Exchange community are very popular.
Doesn't matter, though, because advertising pages has dropped 40% since 2004.
Here's what Peter F. Appert, an analyst at the Piper Jaffray Companies, said to the New York Tmes about the potential sale: “It certainly makes all the sense in the world for them to sell it, even though in my view there is likely to be minimal proceeds, if any. There could be buyers, if the definition of a buyer is someone who’s willing to take it off their hands.”
That last part of his statement is worth repeating: "There could be buyers, if the definition of a buyer is someone who’s willing to take it off their hands.”
What that tells us, unfortunately, is that BusinessWeek is in trouble. That a high profile, important business publication will be spun out, its future uncertain under new owners looking for a bargain.
It means, if McGraw-Hill feels it makes sense to ditch BusinessWeek now, that we're far from being out of the woods, that a recovery is not just around the corner.
Meanwhile the list of failed magazines continues. Former Mets (and Phillies) Lenny Dykstra had filed bankruptcy, and shut down his finance magazine, according to Forbes. "Dykstra Done In By Debts: Ex-ballplayer goes bust, owes millions after failed investment in glossy finance magazine for pro athletes."
In the short-term, we should expect further belt-tightening at the BusinessWeek and other major publications -- that layoffs and offers for buy-outs will continue, that print will continue to look for ways to shrink their publications to save money, continue to look at ways to increase revenues (the problem with a recent Washington Post pay-for-access salons), and that more publications will shift to an online-only business model.
What that also means for PR functions is that the competition for ink will continue to be tough since the number of organizations trying to get into a publicaiton seems to be holding steady while the number of actual pages is shrinking.
It's that the Great Recession has not started rebounding.
Circulation for BusinessWeek is holding steady at about 900,000, but advertising is declining.
BusinessWeek is a great publication, does a terrific job covering news and trends. And its website and BusinessWeek Exchange community are very popular.
Doesn't matter, though, because advertising pages has dropped 40% since 2004.
Here's what Peter F. Appert, an analyst at the Piper Jaffray Companies, said to the New York Tmes about the potential sale: “It certainly makes all the sense in the world for them to sell it, even though in my view there is likely to be minimal proceeds, if any. There could be buyers, if the definition of a buyer is someone who’s willing to take it off their hands.”
That last part of his statement is worth repeating: "There could be buyers, if the definition of a buyer is someone who’s willing to take it off their hands.”
What that tells us, unfortunately, is that BusinessWeek is in trouble. That a high profile, important business publication will be spun out, its future uncertain under new owners looking for a bargain.
It means, if McGraw-Hill feels it makes sense to ditch BusinessWeek now, that we're far from being out of the woods, that a recovery is not just around the corner.
Meanwhile the list of failed magazines continues. Former Mets (and Phillies) Lenny Dykstra had filed bankruptcy, and shut down his finance magazine, according to Forbes. "Dykstra Done In By Debts: Ex-ballplayer goes bust, owes millions after failed investment in glossy finance magazine for pro athletes."
In the short-term, we should expect further belt-tightening at the BusinessWeek and other major publications -- that layoffs and offers for buy-outs will continue, that print will continue to look for ways to shrink their publications to save money, continue to look at ways to increase revenues (the problem with a recent Washington Post pay-for-access salons), and that more publications will shift to an online-only business model.
What that also means for PR functions is that the competition for ink will continue to be tough since the number of organizations trying to get into a publicaiton seems to be holding steady while the number of actual pages is shrinking.
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