This just in:
AOL, continuing to pursue its rollup strategy of aggregating all of the biggest (and/or loudest) brands in online content, has just agreed to purchase the
Huffington Post for a staggering
$315 million, of which $300 million is estimated to be in cash.
Let's set aside whether that price is a reasonable one for a site that's largely driven by transcribed celebrity rants and and 24-point headlines (topping 150-word capsule paraphrases of other people's reporting), not to mention an army of the blogworld's most vicious anonymous
commentrolls. The fact is, HuffPo has found a formula that its readers find irresistible — all
26 million of them, which
Comscore estimates puts them
second in traffic for online "newspapers," after only the
New York Times.
What's amazing about this purchase price is how it values online news content versus traditional news content. Based on an
analysis by
Seeking Alpha's Ben Comston in November 11, 2010, the fair enterprise value of the newspaper operations of the Washington Post — HuffPo's staid semi-namesake — is just over
$200 million...only 2/3rds of what AOL just paid, almost entirely in cash, for HuffPo.
Here's Comston's breakdown of the WaPo Company's total value, by business category:
Newspaper Publishing: $203.8 million
Broadcasting: $881.38 million
Cable Television: $2,197.66 million
Education: $1,031.51 million
Cash, Marketable Securities, and Investments in Affiliates Net of Debt and Deferred Taxes: $635.062 million
In case you were wondering, that billion-plus "Education" segment represents the company's ownership of test-prep giant Stanley Kaplan. Yes, Stanley Kaplan alone is five times as valuable as the paper of Bob Woodward and Carl Bernstein.
Sign of the times, eh?
Posted via email from OriginalSpin