, the social network/news aggregator launched by BusinessWeek only has 37,000 registered users, according to a source at BusinessWeek.
Despite the small amount of users, the site is projected to generate around $5 million of revenue this year, according to another source. That’s up from $600,000 last year.
The site is expected to cost $4.7 million this year, according to the New York Times, meaning it could be a break-even operation, if Bloomberg chooses to keep it up and running.
At this point, we don’t know what Bloomberg plans to do with the site. There’s rumour at BusinessWeek that Bloomberg will keep the site, but we’ve emailed people at Bloomberg and received no response.
The Business Exchange cost $16 million to build from 2007 to 2008. (Though some of the cost went towards revamping BusinessWeek.com.) Last year the site cost $7.6 million to operate, according to the same Times story.
The editorial staff at BusinessWeek are generally dismissive of the site. One person there described it as a “folly” to us. There is a perception that the $20+ million investment in Business Exchange is part of what made McGraw-Hill have to sell BusinessWeek. Since it didn’t take off like a rocket, it might have sunk the magazine.
We don’t agree with this. It makes no sense to spend $20 million on a digital property, then throw in the towel just a few months later. It might have been the opposite — an investment to make BusinessWeek seem more attractive to a buyer.
The magazine was projected to lose $40 million this year. If there was a reason to sell, that was it.
While the Business Exchange has a small number of registered users, it draws millions of pageviews. For a product that’s one year old, potentially operating at break-even, it seems like it should be given a chance to succeed.
Besides, it’s not like the new owner needs to be a penny pincher.