Old Media, New Media … Soon The Same Thing?

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What's going on?

German media giant Axel Springer is in talks to buy US online financial news provider Business Insider (according to Re/code) for a whooping $560 million!

What does this mean?

If completed, this deal would be the latest in a string of deals where traditional media companies have invested in digital media. In the news space, NBC’s parent, Comcast, invested in both Buzzfeed and Vox Media earlier this year – reportedly at valuations of $1.5 billion and $1 billion, respectively. It is also somewhat similar to Fox, NBC and Disney’s investment in online TV provider Hulu and Disney’s purchase of Maker Studios – all are examples of “old media” investing in “new media,” which they hope will provide profit growth in the future.

Why should I care?

  1. Personally:  Axel Springer has been furiously investing in online news sites, including Mic and Ozy – and now possibly Business Insider. It’s transforming its business perhaps more aggressively than any other traditional print media company. If it’s successful at positioning itself as a future news leader, this could be a stock to keep on eye on.
  2. The bigger picture: This is part of a much larger trend of old media companies buying or investing in “new media.” Companies like Axel Springer, News Corp (Fox) and Disney are hoping to, eventually, find new avenues of profit as many of their traditional core businesses are struggling.
Originally posted as part of the Finimize daily email.

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