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Times are tough for many magazines these days. BusinessWeek knows that first-hand. The weekly business magazine will reportedly lose some $40m this year.
But after a long bidding process, it has found a knight in shining armor: Bloomberg LP. The privately-held financial software, data and news company is acquiring BusinessWeek for an undisclosed sum rumored to be in the range of $2-$5m (yes you read that right, million). It will also take on BusinessWeek's liabilities, which could far exceed that amount.
BusinessWeek's tale is a remarkable one because of its stunning fall. The magazine was founded in 1929 a month before the stock market crashed. It survived the Great Depression but couldn't make it through the Great Recession 80 years later. Just nine years ago, in 2000, the magazine had $100m in operating profit.
It was thought by some to be worth $1bn, according to Tom Lowry of BusinessWeek, who reported on his employer's acquisition. So its sale to Bloomberg for $2-$5m highlights just how hard and fast print media has been hit.
Bloomberg, of course, can afford to absorb BusinessWeek. It does over $6bn a year in revenue and most of that comes from its software terminal, which is used extensively in the financial services industry. But it runs a media empire that spans television, radio and print. The company's Bloomberg News division has over 2,200 journalists and clearly Bloomberg sees opportunity in BusinessWeek.
According to Bloomberg Chairman Peter T. Grauer:
The acquisition of BusinessWeek will strengthen Bloomberg's online, television and mobile products. Together, the BusinessWeek.com and the BLOOMBERG.COM Web sites will have more unique visitors than any non-portal business and financial site. We also expect to build BLOOMBERG TELEVISION® content around the powerful BusinessWeek brand and its world-class journalists.
Bloomberg's universe of market makers and BusinessWeek's readership of decision makers create a powerful audience and a unique value proposition for advertisers. The reporting and analytical resources of Bloomberg and BusinessWeek are unparalleled in their ability to deliver timely, distinctive and credible content to an influential and highly sought-after audience.
And the web is where the acquisition gets interesting. That's because BusinessWeek, for all of its struggles, arguably embraced social media more than just about any other large magazine. It invested $20m in its Business Exchange social network and its editor, John A. Byrne, gets the importance of user engagement.
BusinessWeek's stance vis-à-vis social media stands in stark contrast to Bloomberg, which doesn't even permit users to comment on articles published on Bloomberg.com. The question now: will Bloomberg's acquisition of BusinessWeek motivate Bloomberg to adopt social media or will it maintain its status quo? According to BusinessWeek's Lowry, "It still hasn’t been decided whether Bloomberg and BusinessWeek will maintain separate Web sites or be morphed together as one".
In my opinion, if Bloomberg is smart it will use the BusinessWeek acquisition as opportunity to learn more about social media. That, of course, doesn't mean that it needs to embrace it for the sake of embracing it. But it should at least take a look at what BusinessWeek has been doing and consider what benefits, if any, it might be able to realize by adopting some of the social media tools that BusinessWeek has developed and experimented with.
On the other side of the equation, there's a lot that Bloomberg can bring to BusinessWeek. After all, BusinessWeek's social media efforts clearly weren't enough to save the magazine. As someone who reads BusinessWeek, I often find the magazine to be filled with a bit too much fluff. The analysis and insight provided is rarely Economist-level, for instance. Fortunately, it looks like Bloomberg understands that BusinessWeek has a content problem and Lowry reports that one of Bloomberg's goals "will be to substantially boost the magazine’s editorial pages". That's probably not a bad idea.
In short, Bloomberg and BusinessWeek could be a good fit and both stand to gain if the integration is done right.