OLD Media Moves

Why BusinessWeek might be a smart acquisition

August 21, 2009

Rory Maher writes for The Business Insider about why BusinessWeek magazine, currently for sale by McGraw-Hill, might be a good purchase for someone.

Maher writes, “The BusinessWeek.com site currently attracts almost 5 million U.S. uniques per month while still focusing mostly on its print publication. A good management team focused on the site could likely double this traffic over time. Assuming 10 page views per visitor per month and $35 CPM per page across all the ads, the online business could generate about $40 million in U.S. revenue if the right sales force is deployed. (Any modest revenue from overseas traffic would be a bonus.)Â

“That’s a third of the $125 million the WSJ says that BusinessWeek currently makes in revenue a year. But, with print/distribution costs being a quarter of what they once were, and half the payroll costs gone, it’s realistic for this to be a business that generates 20% to 30% profit margins.

“In addition, Forbes.com reaches about 11 million monthly uniques. So if BusinessWeek’s online moves were to gain traction and it catches Forbes over a very reasonable four years, that would represent 28% annual growth.

“Not bad for the likely $30 million the buyer would pay after the first year’s operating losses and severance payments.”

Read more here.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.