Which Media Mogul Would You Rather Be Right Now: Arianna Huffington or Jim Cramer?
by Peter Kafka
Posted on December 2, 2008 at 7:13 AM PT
Doug McIntyre at 24/7 Wall Street makes a provocative point: With a new $25 million round of funding secured, Arianna Huffington’s Huffington Post is now worth about as much as Jim Cramer’s TheStreet.com.
Huffpo’s newest round values the company at about $100 million, which means its investors think it will be worth much more one day. That’s the same value, more or less, that investors place on TheStreet (TSCM), even though it generated some $65 million last year and has about $80 million in cash on hand. McIntyre:
Huffington has several important advantages over TheStreet. For starters, it does not rely on one person for most of its traffic. If Jim Cramer left TSCM, the company would be in real trouble.
Second, Huffington has diversified beyond it political news base. Over the next year or so, it will become clear whether that was a good idea or not. Adding “style” and “entertainment” sections puts it into competition with a lot of other online success stories.
Third, Huffington aggregates a lot of content from around the web. The cost of doing this is remarkably low. The company pays little if anything to most of its bloggers. TheStreet has a relatively large staff and produces most of its own content.
The final difference between the two companies is probably the most telling. At its current rate of growth, which could be hurt by the end of the 2008 election process, Huffington may double in size again over the next year or so, if its efforts to diversify its content works.
It would be hard to find analysts who believe TSCM is going to expand its audience or revenue at a rate of 100%.”
I can think of some counter-arguments to this, but they’re half-hearted: TSCM’s affluent readers should be worth more to advertisers than Huffpo’s; TSCM still has a revenue stream from subscribers to buffet it from ad market turmoil; Huffpo’s aggregation model isn’t unique and could be replicated by anyone who wants to hire some devilishly clever Web editors, etc.
But better to acknowledge that the HuffPo crew have built something very big, very fast. And that anyone who does that gets rewarded for it, even in an econalypse.
Comments
Internet properties that mainly point to content (and there is a very long list of these) melt down pretty quickly when they put the underlying providers of content out of business (or throttle them to the point of bankruptcy).
But you don’t have to think too hard to find other inequities that don’t involve the Internet… Like the thousands of PBS affiliates in the 70’s that relied on government funding to pay for content mostly originating from the BBC (also government funded). Today we have “hundreds” of cable channels most of which are devoid of any original material, and most local papers consist largely of “wire stories” augmented by regurgitated police blotters and high school sports results.
It’s easy to see where we need to be with a 100 percent on-demand system, but it’s hard to see how we get there with so many hands out expecting to be paid for somebody else’s work.
Will the tyranny of the middleman never end?
Douglas Adams had it right in his extended story line where all such people were convinced that they needed to be sent on the first space-ship to found a new planet… I won’t give away the rest of it, but it accurately portrays the predicament we perpetually find ourselves in.
Colonizing Mars, or the Moon, for God’s sake anywhere fairly out of reach would certainly at least provide us with some short term relief.
Bon voyage Arianna!
Posted by Mac Beach at December 2nd, 2008 at 12:22 pmhuff is a political site, no matter what anybody says… and now that the elections are over i think huff could dwindle
she is a good salesperson but that’s all
Posted by Sam Harrison at December 2nd, 2008 at 6:56 pmp.s. how many times will you use the word ‘econolypse’?
it’s getting to be a crutch for poor writing
Posted by Sam Harrison at December 2nd, 2008 at 6:56 pm