Digital Media Facing Reckoning...Daily Beast among digital sites eyeing sale
Daily Beast among digital sites eyeing sale
by Dylan Byers November 17, 2017: 4:11 PM ET
Digital media is facing a reckoning.
The start-ups that were once the darlings of the industry
are facing budget shortfalls and revenue declines as they struggle to survive
in an over-saturated market where Google and Facebook lay claim to the vast
majority of ad dollars.
Now, the bubble is bursting and many of these companies
are looking to sell.
In the latest evidence of volatility, CNN has learned
that IAC is entertaining potential buyers for The Daily Beast, the news and
opinion site launched nearly a decade ago by former Vanity Fair editor Tina
Brown.
"IAC has made it known it's a seller and various
outlets are taking a look," one source with knowledge of IAC's sales pitch
said. "They're shopping to all interested parties."
Other sources with knowledge of the talks said IAC was
only entertaining offers initiated by outside parties, and that no formal sales
effort was in place.
The sources did not disclose any other details, including
how much IAC hopes to get for the Beast. An IAC spokesperson said "IAC
does not comment on rumors or speculation."
Minutes after this report was published, Daily Beast
president Heather Dietrick emailed staff and said there was "no sales
process going on for The Beast," but that IAC often "fields inquiries
from third parties looking to talk about purchases, sales, or
investments."
"In fact I wouldn't be surprised if others come by
and ask to take a peek because of the way we've been driving the conversation
in news lately," she wrote.
The Daily Beast is hardly alone.
Mashable, which was valued at $250 million early last
year, has reportedly agreed to sell itself for just $50 million to the trade
publisher Ziff Davis.
Univision is reportedly looking for investors to buy a
minority stake in their Fusion Media Group, which includes the former Gawker
Media sites and the Onion, as well as Fusion TV.
Meanwhile, BuzzFeed is on track to miss its revenue
targets by as much as 20% and is no longer likely to file for an initial public
offering next year, the Wall Street Journal reported Thursday. Vice, too, will
fall short of its projected revenues.
Even CNN Digital, which brought in its highest revenue in
history this year, expects to fall short of its revenue projections by at least
$20 million dollars, according to BuzzFeed.
So, what happened?
In a number of cases, companies failed to meet the
sky-high numbers they promised to investors. Some, like BuzzFeed and Mashable,
scaled-up by being omnipresent on social media without figuring out how to make
enough money off those platforms.
Meanwhile, those platforms -- most notably Facebook and
Google -- started taking larger and larger chunks of the available advertising
revenue. Today, the Facebook-Google duopoly owns between 60 to 70% of the U.S.
digital ad market, leaving digital media companies to fight over crumbs.
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