ContentBlog: How Much is Your ePub Biz Worth?; Why Jupiter Sucks; Useful Links

1. How Much is Your Online Publication Biz Worth?
2. Useful Link for Amazon Booksellers
3. How Online Journalism is Different From Print
4. Link to Chart of Yahoo's For-Fee Offerings
5. IDC & Forrester Diving
6. Expect Screaming Syndication Checks to Fall
7. Jupiter Sucks at Marketing Content Online
8. How to Make Money in Online Directory Publishing


***** THIS WEEK'S CONTENTBLOG

[01/14/02 12:49PM] HOW MUCH IS YOUR EPUB BIZ WORTH?

A ContentBiz reader just wrote in, "When any of the big
traditional publishers purchase companies, what kind of valuation
metrics do you they typically like to use? Multiples of cash
flow? xxx??"

It's a question that comes up a lot, so here's a quick down 'n'
dirty answer:

Periodical publishing companies (newsletters, magazines, ezines,
content sites) typically sell for one to three times their annual
gross revenues. So if you grossed a million last year, you could
sell for one-three million. In boom times this can go as high as
five times annual revenues. Veronis Suhler, a merchant bank to
the media industry (which they call the "communications industry"
even though they're not talking about telcom) publishes an annual
guide to these valuations for a lot of money, but you can usually
wheedle a free copy if you know a client, or are considering
becoming one.

The actual deal points are where it gets tricky. The buyer almost
never ever pays that cash in a lump sum up-front. Their goal is
to pay as little cash up front as they can get away with, and
make the rest stock and/or contingent on your pub's future sales.

Which means the seller is crossing their fingers hoping the buyer
really is FABULOUS at marketing so the pub continues to grow and
make them money. Often a seller will promise "Oh we're going to
put our weight behind this pub and make it huge, and you'll get a
cut of this if you sell to us now." But then as the economy or
their internal biz plans change, anything can happen.

Also beware accepting a percent of EBITDA (earnings before tax
and interest) because the buyer can fiddle the books to take out
all sorts of expenses before they get to the amount they give you
a slice of. It's the old Hollywood scam -- the movie made
zillions at the box office, but never showed a profit for
investors.

ALWAYS talk to other companies the buyer has negotiated with in
the past, to find out what they're really like when the chips are
down. Often the buyer that wins is not the buyer who offers the
highest price. Cultural fit, marketing promises, product line
fit, the buyer's passion for your product, ego stroking, etc.,
all affect selling decisions.

When you decide it's time to sell, first put together an
"offering package" (aka "a black book") with the following
information:
- history of the publication
- total market size
- circulation/ traffic
- renewal rates if relevant
- marketing tactics used
- financials for past three years
- worst-case scenario cash flow projections for next year

You can hire a broker to shop the offering for you. Generally
they'll get 5-10% of the price as a commission (the smaller you
are, the higher it will be to make it worth their time.) Contact
the folks at the Newsletters & Electronic Publisher's Association
or American Business Media to get a list of brokers' names who
handle deals like yours.
http://www.veronissuhler.com
http://www.newsletters.org
http://www.americanbusinessmedia.com

[01/14/02 11:13AM] USEFUL LINK FOR AMAZON BOOKSELLERS

If you are selling through Amazon, you'll enjoy this quick
article that About's Guide to Publishing, Wendy Butler, just
posted on how to watch your book's sales rank more easily, and
what it takes to get in the top 100 these days.
http://publishing.about.com/library/weekly/aa010802a.htm

[01/11/20 5:39PM] HOW ONLINE JOURNALISM IS DIFFERENT FROM PRINT

It's beginning to dawn on me (I know, I'm slow) that online
journalism is more different from print journalism than I had
imagined. At first I thought it was about getting to the point
quickly, without dawdling in introductory paragraphs; and,
generally writing more concisely with some hotlinks tossed in.

The only other difference I spotted was in the importance of
headlines. In print they try to get you to glance down. In "e" we
try to get you to click. Which is harder. Or we try to show up in
search results, which requires even more pre-thinking.

(In my past life, I have many fond memories of giving speeches to
groups of hard bitten journalists, to whom the concerns of
marketing were as dust to be ground beneath their church 'n'
state feet. "Please remember to use terms in your headlines that
people might search Lexis-Nexis for!" I'd urge. The editorial
staff would look suitably bleary-eyed and non-business-minded in
response.)

This morning during a phone conversation with Nancy Robeke of
Profnet.org (no, not the PRNewswire folks, a different group),
the whole thing crystalized for me. It's not only about story
length and searchability, it's about tone and personality.

Nancy's theory is that online people can't see your body language
or hear your voice's enthusaism, so you need to be more personal
with your tone to reach across that breach. But, coming from
print which never had audio or visual before, I think it's just
that people want content on their computers (and PDAs) to be
slightly more personal than the official voice of hard copy.

Will this continue forever? Certainly not. Does this affect your
online business (email open rates, clicks on your house ads,
clicks on 3rd party ads) for now? Absolutely.

Of course, this adds a whole 'nother level of complication when
it comes to hiring these days. Not only do reporters have to be
good at investigating and writing, but they also have to have a
personality that both comes across and appeals -- without turning
into one of those egomaniacal deals in 24 months where you're
paying through the nose salary-wise to keep their massive
personal fan club on your readership list.

[01/10/02 4:06PM] LINK TO CHART OF YAHOO'S FOR-FEE OFFERINGS

January 10th issue of SiliconAlleyDaily features a great chart of
all of Yahoo's forays into paid content offerings and their
prices. Unfortunately it doesn't say how much of anything has
actually sold. But hey you can't expect perfection for free ;-)
http://www.siliconalleydaily.com - search under date Jan 10.

[01/10/02 2:44PM] IDC & FORRESTER DIVING

In an email freakishly entitled, "A Ray of Hope in Difficult
Seas", research firm IDC announced this afternoon that they are
ceasing publication of their eBusiness Trends email newsletter.
The title about hope applied to the article accompanying this
announcement. This morning competing research firm Forrester also
announced layoffs of more than 100 employees.

[01/10/02 10:35AM] EXPECT SCREAMING SYNDICATION CHECKS TO FALL

In the fall of 2000, I started reporting in ContentBiz that the
biggest trend in the content syndication industry was to, well,
not focus on selling content. Content resellers and
aggregator/syndicators such as YellowBrix, Moreover.com,
iSyndicate and ScreamingMedia were all talking about how their
tech products were gonna make the big bucks. 2001 saw
Moreover.com change its name to Moreover Technologies, and
iSyndicate was acquired by YellowBrix who promptly shut down the
express syndication services.

Today the trend continues despite the fact that nobody seems to
be doing incredibly well with this we-sell-tech biz model.

ScreamingMedia just announced their new CEO and President, Kirk
Loevner, "brings ScreamingMedia 20 years of experience managing
some of the leading technology companies. So I'm taking a wild
stab in the dark here and predicting that the content sales
checks publishers get from ScreamingMedia, which according to
both my personal and ContentBiz reader experiences have been
dwindling at a steady rate, will not get much fatter in 2002.

[01/09/02 9:21AM] JUPITER SUCKS AT MARKETING CONTENT ONLINE

Jupiter just launched a new commerce section on their site to
sell research reports. Unfortunately they make the same mistake
that most online research sellers make ... they don't really
MARKET the report to visitors. There's a dry paragraph or two of
description and then a price tag. I used to market high-end
research reports for a big B-to-B publishing company, so I can tell
you the following is essential to sell a report online or off:

- a complete table of contents in as much detail as possible
- a list of all charts and graphs in the report (Often people buy
just for one chart)
- a few sample pages (sometimes intro will do) - preferably
including a sample chart
- some sort of indication about who this content is aimed at --
what title, what job position, what industry?
- if possible a client testimonial or expert review
- number of pages, publication date, number of charts, format
(hard copy, pdf, etc.)
- shipping options for hard copy

oh, and ya know, compelling, benefits-driven sales copy. As in
how will this this report help them make their companies more
profitable, or whatever?
http://commerce.jmm.com/jupdirect.asp?raid=1004&ssid=-1


[01/08/02 3:06PM] HOW TO MAKE MONEY IN ONLINE DIRECTORY PUBLISHING

How do you make money in the directory business online? Here's
what I learned while doing research for an unrelated report we're
working on. The vertical was directories of ad agencies.

Almost everyone was the same in one key way -- they have three
levels of service, usually with cute names (bronze, silver, gold
.. you know the drill.) Generally a free level for a plain
vanilla listing, a moderately priced level ($20-100 month) for a
listing with a few bells and whistles, and a top priced level
($50-350 month, or a flat annual fee around $5000) for a listing
with lots of bells and whistles.

There were two different business models - one which is basically
a deluxe hosting service, where you can send them your stuff and
they create a lovely online portfolio (aka mini-site) for you and
promise lots of their client-side traffic will notice it. The
second is the RFP model where in return for paying for a listing,
you then get emailed any sales leads (requests for proposal)
their site garners from visitors in your niche. The two biz
models were never offered together under one roof. Either you can
use a site to get noticed, or you can get RFPs.

(The only unusual one was Newmediary who offer both their self-
named RFP service and IT Papers, a service marketers pay so links
to their marketing white papers are distributed across the Web to
gather sales leads.)

Although everyone knows biz execs are buying and researching
vendors more online now these days, one thing became apparent.
Nobody is making out like a bandit yet in either biz model. The
RFP sites still don't get enough qualified RFPs into the pipeline
to please clients. The portfolio, get-you-noticed, sites still
don't get enough client-side (vs. competitors checking each other
out.)

Part of this is due to too many competitors during the boom,
which split potential traffic into too many factions. Parts also
due to the fact that 90% of these sites know that they need
partnerships and co-brand sites to get traffic, but they still
don't use Web usability principals and hard-core marketing, to
really get the traffic funneled in from their partners that they
deserve. You need more than a link or a button on a navigation
bar to get the real stuff. Some B2C sites have learned the hard
way how to hand-hold partner/co-brand relationships to really get
the traffic flowing, now the B-to-B directory sites need to follow
their lead.

On the good news front, two of the portfolio-style services I
researched were using great email newsletters to push traffic to
their paying members' site sections. For samples of these sign up
for the newsletters at Portfolios.com and AgencyCompile.com.

On the bad news front, Newmediary's IT Papers appears to be
selling marketers visitor's email addresses when these visitors
click on to view those vendor's white papers. Although this fact
is probably noted in privacy policy fine print and perhaps
alluded to in a phrase when the visitor first register to surf
the site, I'll bet 99% of these visitors don't exactly realize
their email is given out to a different company each time they
click on a white paper link. And I'll bet the sales reps for said
companies who get these leads, probably receive very little
instruction about how NOT to use the names to avoid the
appearance of spam (such as, don't add them to your broadcast
list and email them relentlessly until they scream stop.)

Anyway, it's a cool biz model -- pay us to distribute your
marketing materials to our directory surfers. Kinda the grown-up
version of trade magazine bingo cards. BitPipe is their top
competitor.

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