Aug 12, 2002
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M&A trend: Over the past few weeks several would-be online subscription publishers have approached me to ask, "Do you know any subscription sites I could buy?" One last night added, "They should be already be profitable." Others have told me they don't
care whether the publisher is online-only or partially print, but there should be some online component.
Most are looking for small-mid-sized firms to buy. A few hundred B2B subscribers or a few thousand B2C subscribers. Something semi-proven that they can come in and grow substantially with their cash and/or publishing wisdom.
Only problem, these smallish pubs are not remotely interested in selling right now. They probably have 3-5 employees, and are making an OK (maybe not thrilling but definitely OK) living at this, plus enjoying the whole work-in-your-PJs lifestyle. They know when the economy improves they'll probably make an even
better living. If they want to sell, it's worth waiting until after the recession to do it because right now you won't get enough return for your sweat equity investment.
Analogy: You never want to sell your beloved house in a down market when you know it will be worth a whole lot more if you wait a bit, plus where the heck would you live if you sold?
The publisher-side folks who have approached me about selling are almost always the ones which are bigger. Folks with dozens of
employees and a higher burn rate. Often profitable, but maybe just on the edge of it. They've worked very hard at growing their
service to be as big as possible, thrown some investor money at it, burned the midnight oil, and gotten it to a thin wedge of black. Not the 20% average profit I was used to seeing as normal for a print niche ezine, but not losing money either.
I'm not sure why these guys want to get out of the game now. Maybe because when they started, they expected it to be a 3-year game. Get money, launch, sell. Now that the economy is dragging, it's obviously gonna take much lonher than anyone thought to become zillionaires with your dot-com site. So perhaps these guys are cutting their losses and moving on to the next opportunity.
Analogy: These are people who buy houses for investment and then flip them and move on to the next one. It's not about living in
the house, it's about moving on to the next one.
Anyway, although loads of people have contacted me on either side of the equation, nobody wants to come public in the Blog, yet. If you do, let me know and I'll post it here.
Otherwise, we're launching a new ContentBiz
membership site in a few weeks where you'll be able to post stuff like this privately to our members only.