Media guru Michael Wolff wrote a column in USA Today suggesting that we should sell Business Insider.
Mr. Wolff first said some nice things about me personally (thank you!). Then he did some back-of-the-envelope maths and suggested that we should sell now for $US100 million.
Interestingly, when we started Business Insider six years ago, I used to tell people that our goal was to build a great publication and then sell it to Rupert Murdoch for… $US100 million. In those days, when we had only a few people on the team and a few thousand readers a day, this goal seemed so preposterous that it made people laugh. And it’s fun to make people laugh. So I kept telling them that.
Over the past 6 years, though, the goal has evolved.
First, we now have more than 125 people on the team and 1-2 million readers a day (30+ million a month), which would have been inconceivable back in our loading-dock days. Last month, this readership made us the third biggest digital business news publication, behind only the Wall Street Journal and Forbes. (We now have more readers each month than Bloomberg.com, BusinessWeek.com, CNBC.com, the FT, the Economist, and many other awesome publications. That’s pretty cool!)
Second, I have come to understand that great media brands take decades to build, not a few years. The other 8 big business publications, for example, have been around for a combined 737 years. CNN launched in 1981, and it was at least a decade before it really went mainstream. And it was 16 or 17 years before Ted Turner finally sold it to Time Warner.
Third, as I suspected 6 years ago, successful digital journalism really is different — as different from print and broadcast journalism as print and broadcast are from each other. To build a successful digital journalism business, you have to build a native digital newsroom, native digital distribution, a native digital business model, and a native digital cost structure. And building those things isn’t as easy as it may seem.
(Think about the NYT suddenly trying to launch a cable news network, and you get the idea. The New York Times is amazing at print. And TV networks are amazing at TV. But digital is different, and you can’t just shove square print and broadcast pegs in round digital holes.)
I love my job and am in no hurry to stop doing it. And I’m proud as hell of our team. And I really do think that this is a golden age for journalism and that we’re only in the early innings of what good digital news companies like Business Insider can become. (Specifically, we can become great.)
So, bottom line, we don’t feel any great desire to sell.*
We would never say never, of course. There are many benefits to consolidation and scale in media, and I fully expect the digital media industry to consolidate. At some point, we will probably either help consolidate the industry or be consolidated. But I honestly don’t know when or which.
By the way, there are a couple of things I don’t think Mr. Wolff gets quite right about us.
First, he suggests that I am a fixture on the New York media party circuit. One prominent digital journalist who is, in fact, a fixture on this circuit — Felix Salmon — snarfed in his coffee when he read this. Felix points out that I actually don’t make it to these parties all that often.
Second, I’m not sure Mr. Wolff fully appreciates how the trends in the digital media business are playing out with respect to native digital companies like ours.
Mr. Wolff is right that there is pressure on ad prices across the industry. And he is right that mobile readership currently “monetizes” at lower rates than readership on big screens.
But what Mr. Wolff may not fully appreciate is that these trends are actually helpful to us.
You see, our major competitors — the Wall Street Journal and Bloomberg, for example — still charge (and receive) very high prices for their digital ads. Thanks to the rapid growth of ad networks, social networks, and native digital publications, however — all of which help premium clients reach readers more cost-effectively — these prices are increasingly unsustainable. This trend is what is clobbering the digital ad business of the New York Times and other traditional publications.
Native digital publications like ours, meanwhile, help clients reach readers more cost-effectively. We also reach the next generation of business leaders — the digital generation — not just folks who read print publications. As a result, as we continue to introduce more clients to the benefits of working with Business Insider, our revenue per reader is actually rising.
Happily, our revenue per reader is also already above the level we need to build a sustainable long-term business. As a result, we will be profitable this quarter, despite continuing to invest heavily for next year and beyond.
Now, there are no guarantees in life, and it’s certainly possible that we will look back and feel like morons for not following USA Today’s advice.
But having done this for as long as I have, I can attest to the fact that there are many great reasons to build a business beyond the “exit.” And obsessing about an “exit,” I think, often causes companies to make short-term decisions that ultimately hurt them over the long haul.
At Business Insider, we have two simple priorities:
- Put readers and clients first
- Get better every day
We believe that if we do those things well, everything else will take care of itself.
SEE ALSO: Business Insider Secrets Revealed!
* Especially for a mere $US100 million! ;)
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