Friday, March 4, 2005
About NYTimes $400M+ acquisition
PaidContent interviewed Martin Nisenholtz, SVP-Digital Operations, NYTCO a few days ago about the recent $400M+ About.com acquisition which caused many people to say Internet bubble.
One of the questions I've heard a lot is 'Why didn't they just start their own?' 'Why do they have to buy another company?' Wouldn't it be less expensive to start your own version of About.com?
Nisenholtz: You can say that about any business. I think that's a kind of a, if you'll forgive me, a kind of dot.com sentiment. About.com had in 2004 significant revenues and profits. It had great margins, so anybody can start any business at any time but getting it up to the point where it is right now is going to take a lot of time in my opinion. So I don't think that that necessarily holds any water. It's a highly complex and very profitable business and it would be time consuming and difficult to replicate it very quickly.
The risks of starting something like that from scratch are enormous. Imagine trying to attract 21 million users on the internet. But beyond that, how would you replicate the million-document database that they own? It's the web's largest document database.