Marketwatch to Dow Jones
Last week, we mentioned the consolidation taking place in Financial Media.
This effectively triples DJ's reach. Dow Jones' WSJ.com (paid subscription access only) averaged 2.8 million "unique visitors" every month. MarketWatch, which is a free site, had 7.6 million visitors.
The purchase will give Dow Jones a "dual" model: a high end subscription site, including Barrons and WSJ, and a higher traffic, free site. One would expect economies of scale and creative advertising packaging (different sites with different demographics) to make this work on an ongoing basis.
I haven't drilled down thru the numbers to see if they are overpaying, but it seems rich at first glance.
Next up: What do the suitors who failed to snag Marketwatch -- NYT, Reuters, Yahoo!, etc. -- do instead? They look at whether The Street.com offers a viable alternative to Marketwatch help bulk up traffic.
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GOOD FOR MKTW. THEY HELD AN AUCTION PROCESS AND GOT THE BEST BID. YOUR COMPARISON OR ASSUMPTION THAT TSCM IS AN ALTERNATIVE TO OTHERS WHO MISSED ON THE BIDDING ACTION IS OFF BASE. MKTW IS A NEWS REPORTING SERVICE, WITH A BIT OF COMMENTARY THROWN IN BY SOME QUALIFIED WALL STREET/JOURNALIST TYPES. ALL FOR FREE. MKTW HAS HAD A NICE RAMP IN REVENUES FROM ADVERTISING AND PAID SERVICES. TSCM HAS A DIFFERENT BUSINESS MODEL, CONCENTRATING ON BUY AND SELL SIDE ANALYSTS SHARING THEIR THOUGHTS ON A PAID BASIS. THAT IS WHY THEIR INCOME STATEMENT AND REVENUE GROWTH SUFFERS(REALMONEY). THESTREET.COM AS A REPORTING SERVICE LACKS SEVERELY IN CONTENT AND VERSATILITY. MKTW AND DJ TOGETHER MAKE SENSE, SINCE THEIR WOULD BE EDITORIAL OVERLAP SOLVED BY COST CUTTING AND A SENSE OF FUTURE PROFITABLITY. TSCM AND ANY OTHER SITE WOULD OFFER NO SUCH SYNERGY, AND WOULD REPRESENT JUST AN ACQUISITION. SINCE TSCM HAS YET TO TURN A PROFIT, AN ACQUISITION BY A SUITOR WOULD MAKE LITTLE SENSE, UNLESS TSCM CUTS ITS PAYMENT TO CONTRIBUTORS. IN THAT CASE, WHY WOULD A WALL STREET PRO EVEN WANT TO CONTRIBUTE, GIVEN THE DISCLOSURE RISKS IN THE BUSINESS. TSCM SHOULD REMAIN ON ITS OWN, A VIABLE SITE FOR THE PROFESSIONAL TRADER.
Posted by: ANON | Nov 15, 2004 3:17:46 PM
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