The German media giant Axel Springer said Tuesday it has paid $343 million to acquire almost all of the U.S. news site Business Insider.
The Berlin-based company, which already operates multiple newspapers and websites in Europe, said the acquisition expands its digital audience to almost 200 million users. Business Insider (which syndicates Marketplace content) is now valued at $390 million — up from $100 million last year. The site has a monthly unique audience of 76 million, according to Axel Springer.
The draw for Axel Springer is entry into the U.S. market through an audience that is relatively young and tech savvy. Business Insider started out as a Silicon Valley news source.
It’s an important niche: a young, techie audience, said Susan Bidel, a senior analyst at Forrester Research.
“You need to know what Business Insider is writing about, because that’s what everyone is going to be talking about that day,” Bidel said, “in Silicon Alley and Silicon Beach.” (Also known as New York and Los Angeles, the first and second largest media markets in the U.S.)
That kind of audience and market access is valuable, Bidel said.
“Certainly when you get a digital start-up… your audience is going to tilt younger, and that’s a sort of a good thing as you look into the future,” said Rick Edmonds, a media business analyst at the Poynter Institute.
Ad dollars are in search of young, impressionable eyeballs. And they’ve been skewing digital, accounting for more than a quarter of all media advertising, said Amy Mitchell, director of journalism research at the Pew Center.
And digital news sites are good at getting and keeping young audiences on mobile and social media. For example, BuzzFeed is one of the most popular mobile apps with 18- to 34-year-olds, right along Tinder and Snapchat, according to comScore’s August numbers.
Business Insider’s valuation is a relative bargain compared to some of its peers. Vox Media and BuzzFeed both recently got investments of $200 million each from Comcast’s NBCUniversal. Vox was last valued at $850 million and BuzzFeed at $1.5 billion. Two years ago, 21st Century Fox bought a stake in Vice Media, then valuing the company at $1.4 billion. Its latest valuation was at $2.5 billion.
“You could buy the Washington Post and probably the Boston Globe, too,” at the price that Springer paid for Business Insider, Edmonds said.
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