Bershidsky writes, “The deal sends a powerful message about Axel Springer’s ambitions. The company said Tuesday that the acquisition puts it in sixth place among international publishers by audience reach — a feat made possible by Business Insider’s 76 million unique visitors per month. Doepfner called the purchase Springer’s biggest step into the English-speaking world.
“As a business proposition, the benefits of the acquisition are less clear. Springer’s chief financial officer, Julian Deutz, said Tuesday that Business Insider would have been profitable this year had it not invested in global expansion and two new sites, Tech Insider and simply Insider, a general interest offering. In 2016, Springer projects Business Insider’s valuation to equal six times revenue, and break-even is only expected in 2018.
“The German company reports the results of the U.S. site among its ‘Paid Models’ assets, so called because they include titles that have paying subscribers — such as Bild. About half of that segment’s revenue comes from subscriptions. Business Insider, though, makes almost all of its money from advertising — that’s what makes it vastly different from the FT with its 720,000 digital subscribers. Business Insider is essentially a traffic reseller, producing lots of stories with catchy headlines and selling advertisers on the eyeballs they collect.”
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