Tag Archives: Forbes

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Why Time Inc. should buy Forbes

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Lucia Moses of Adweek writes Tuesday about why a Time Inc. purchase of Forbes magazine makes sense even though it already owns Fortune.

Moses writes, “Fortune has a meager online presence, having been a channel of JV partner CNNMoney.com over the course of their 8-year partnership. (Fortune doesn’t say what its dedicated traffic is, but one person familiar with the business estimated it to be around 2 million monthly uniques.) Come next May, that partnership is set to dissolve, leaving Fortune on its own to start a new financial news website.

“But that’ll be an uphill battle in a category already crowded with bigger, more established online competitors like The Economist, The Wall Street Journal, and, of course, Forbes. Forbes would give Fortune instant online scale, with 28 million uniques worldwide (per the company, citing comScore). It also would give Time Inc. CEO Joe Ripp a way to boost his digital credibility and appear to be a risk-taker with the Street, as Forbes now gets more than half of its ad revenue from digital. (There’s also been talk that getting a deal done pre-spinoff also benefits Time Inc. because the bill would be paid by Time Warner.)

“A Forbes deal also could accomplish symbolic, but still important goals. Ripp has been trying to change the company’s culture and move into new ad formats. Forbes has built its business on the unorthodox practice of letting advertisers (as well as unpaid outside contributors) publish on the site alongside paid staffers—a controversial move, but one that’s been widely imitated by other online publishers. Forbes expects one-fifth of its ad revenue to come from its BrandVoice native ad platform this year.”

Read more here.

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Mansueto interested in acquiring Forbes

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Joe Mansueto, who owns Fast Company and Inc. magazines, is interested in acquiring Forbes, reports Keith Kelly of the New York Post.

Kelly writes, “Reached via email, he declined to comment on Forbes.

“He’s no stranger to the publication, since he was listed as the 260th wealthiest person in America on the most recent Forbes 400 list, with an estimated net worth of $2.1 billion.

“Mansueto would fit the profile of other moguls who have snapped up struggling print properties, including Jeff Bezos, who bought the Washington Post for $250 million, and Boston Red Sox owner John Henry who bought the Boston Globe for $70 million.

“Despite Forbes Media’s digital growth and 20 percent of ad revenues coming from so-called native advertising platforms, industry sources are betting it fetches far less than the $400 million that minority owner Elevation Partners and the Forbes family are said to be hoping for.

“Mansueto already owns Fast Company and Inc. through his Mansueto Ventures. he sold his stake in Time Out Chicago but is among the investors in Wrapports which bought the Chicago Sun Times last year.”

Read more here.

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Forbes may have hard time finding buyer at $400 million

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Forbes magazine may not be able to find someone willing to pay the asking price of $400 million for the company, reports Keith Kelly of the New York Post.

Kelly writes, “If it gets sold, the best guess is that it will go to a wealthy overseas buyer, attracted by the magazine with the motto ‘The Capitalist Tool,’ or a wealthy vanity player along the lines of Jeff Bezos, who bought the Washington Post for $250 million, and John Henry, the new owner of the Boston Globe.

“‘It’s a better brand than it is a business,’ said one investment adviser, who has not looked at the books being sent around by Deutsche Bank.

“Forbes’ reputation in Asia, where it has seven licensees, is probably stronger than it is in the US.

“But that may not be enough.

“I do think $400 million is the very top limit and suggests an unrealistic multiple,’ said Stewart Pinkerton, a one-time managing editor at Forbes who left in 2009 and went on to write ‘The Fall of the House of Forbes’ in 2011.”

Read more here.

Morgan Brennan

CNBC hires general assignment reporter from Forbes

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Nik Deogun, the senior vice president and editor in chief of business news at CNBC, sent out the following staff hire announcement:

I am pleased to announce that Morgan Brennan will be joining CNBC as a general assignment reporter, effective Monday, December 9.

Morgan comes to us from Forbes Media where she was a staff writer and reporter. She reported stories for Forbes Magazine, ForbesLife Magazine and Forbes.com, most recently covering the real estate beat. She also worked as an anchor/reporter and producer for the Forbes Video Network. In addition, she was a regular guest discussing business and economic stories on a variety of networks.

Morgan graduated summa cum laude from New York University, where she majored in Social Science with a double concentration in Anthropology and Media Studies.

Please join me in welcoming Morgan to CNBC.

Forbes cover Blakely

Forbes’ sale prospects boosted by NY Times article

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Michael Wolff writes Monday for the Guardian how a profile in The New York Times last week helped Forbes magazine create an illusion of success, allowing it to put itself up for sale.

Wolff writes, “Forbes had clearly used the Times to help create an illusion. In fact, illusion is what the Forbes business had largely become. Forbes was once the business magazine of the high-trouser country-club set, a rock of free marketeering and bible of mid-size company executives, worth several billion dollars. Then, along with other business magazines after the dotcom crash, it began slipping. And slipping.

“Forbes responded to this evident existential change in a different way than most of its peer group magazines, who went into a long period of denial. A single title that supported the multi-generational Forbes family, Forbes openly began to panic. In addition to selling off assets – including its Fabergé eggs, its yacht, and its real estate – the Forbes family, which had long run the magazine, seemed to throw up its hands and let anybody who was game have a whack at it.

“The first result, pioneered by Jim Spanfeller, was a web strategy, as aggressive as almost any from an established magazine. While its traffic methods became the focus of great skepticism and outright derision, at the same time it helped create the more or less dubious models that almost all traffic aggregators have used since.

“While the magazine’s core business tanked, its traffic spiked, making it became one of the few traditional print properties to successfully push the illusion of its own transformation. Elevation Partners, a Silicon Valley venture fund, less known for its technology investment prowess than for its relationship with Bono, bought into the Forbes transformation in 2006 and helped buttress its cash drain.”

Read more here.

James Michaels

New Forbes owners should channel Jim Michaels

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Dean Starkman of Columbia Journalism Review writes that whoever purchases Forbes magazine would be wise to bring back the flair and style of former editor Jim Michaels.

Starkman writes, “The son of a Buffalo burlesque owner, Michaels distinguished himself as a wire reporter (he was first to report Gandhi’s assassination in 1948) and eventually brought a new rigor and edge to the always quirky magazine. He sharpened the magazine’s writing (a colleague said he could ‘edit the Lord’s Prayer down to six words and nobody would miss anything’) and elevated its ‘attack piece,’ the business investigation, into a Forbes staple and defining feature. The magazine was a talent factory and in the 1980s routinely cranked out killer exposés, including Loeb-award winners like one on a highflying savings and loan, Financial Corporation of America, by Allan Sloan and Howard Rudnitsky, and a takedown by Richard Stern on the notorious small-stock boiler-room operator Robert Brennan.

“‘Like well-crafted jury summations, they proved, never asserted,’ writes a former managing editor, Stewart Pinkerton, of the classic Forbes story. Pinkerton’s 2011 Fall of the House of Forbes, along with Christopher Winans’s excellent 1990 biography, Malcolm Forbes both nicely emphasize Michaels’s outsized role.

“Michaels’ tirades were famous (or notorious, depending on whether you were the target). ‘This isn’t reporting,’ he scribbled atop one particularly credulous piece, according to Pinkerton. ‘It’s stenography! Why is this person still on staff????’ In one of my favorite anecdotes, recounted by Pinkerton, Michaels at an editorial meeting spontaneously blurts out: ‘It’s time for a really nasty story. Let’s really stir up the animals.’ The result was a scathing piece on the spendthrift ways of William Agee and wife, Mary Cunningham Agee, who had achieved notoriety for mixing business and romance at Bendix Corp. and who were then involved with construction firm Morrison-Knudsen.”

Read more here. Here is a biography of Michaels written by one of my former students.

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Forbes minority shareholders would be paid first in sale

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The minority shareholders of Forbes Media would be paid first if the company is sold, reports Dan Primack of Fortune.

Primack writes, “Back in 2006, a private equity firm called Elevation Partners — whose partners include rock star Bono and former Apple exec Fred Anderson — acquired a minority stake in Forbes’ digital operations (the online and offline operations were merged in 2009). No financial terms were disclosed, but Fortune has learned that the total investment was $264 million. Moreover, the deal was structured as preferred stock, meaning that Elevation would get paid back first in the event of a sale (and then share in any gains).

“That provision is paramount today, given the asking price. If Forbes sells for $400 million, then minority shareholder Elevation would receive a majority of the proceeds. Not too shabby, particularly given that Elevation had written its Forbes investment down by more than 75%.

“For Elevation, this would be its second major save. The firm previously looked to have made a massive mistake by investing $460 million into mobile device maker Palm, but used a sophisticated structure — plus an unexpectedly generous buyout from Hewlett-Packard — to eek out around a $25 million profit. It also has experienced large gains via smaller investments in both Facebook and Yelp.”

Read more here.

Forbes Cover

A business news rollup strategy

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Felix Salmon of Reuters argues that someone — he suggests Yahoo — could purchase Forbes, Business Insider, TheStreet.com and SeekingAlpha.com and great a financial news powerhouse.

Salmon writes, “The companies are complementary in many ways. Forbes has a big ad-sales base, as well as a storied brand name, a large events business, and a valuable network of thousands of editorial contributors; it is also furthest along in terms of building a strong native-advertising franchise. Business Insider has growth, attitude, aggression, speed, and by far the most web-native newsroom in financial media. It knows what people want to read, and it is extremely good at providing exactly that. TheStreet, meanwhile, has an enviable list of stock-market investors who are willing to spend serious amounts of money on newsletter subscriptions; it also has a very sophisticated video setup, and last year spent $6 million buying The Deal, which reaches pretty much everybody who matters in the New York financial industry. And Seeking Alpha has managed to build up an extraordinary base of reader-contributors, who between them provide some of the most timely and sophisticated stock-market analysis on the web.

“The big question is, of course: who has $700 million to spend on such a roll-up, as well as the managerial and technological nous to get them all to play nicely together? The facile answer is: anybody who can afford to spend $400 million on Forbes alone can afford to spend $700 million on something which is much more likely to make a real impact. But still, we’re talking about real money here. Which means that one company in particular springs to mind as the place which could put a deal like this together: Yahoo.

“Yahoo already owns Yahoo Finance, which is by far the most valuable financial property on the web. (It’s also, for my money, the single highest-quality product that Yahoo owns.) Yahoo is also in acquire-and-expand mode right now, buying up anything with buzz. $700 million is less than two-thirds what Marissa Mayer paid for Tumblr; she has $1.8 billion in cash alone, and might well come into even more, depending on what happens with Alibaba. On top of that, Yahoo Finance could provide the kind of readership and quality data services that all of the rolled-up companies would kill for: it has the makings of a great platform on which to build a truly formidable financial-media competitor.”

Read more here.

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Forbes CEO’s memo to staff on possible sale

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Here is the memo that Forbes Media CEO Mike Perlis sent to the staff on Friday morning:

So much has been accomplished recently, and we’re very much in the spotlight these days.  We’re seen as innovators with extraordinary business momentum.  This year is expected to mark our best financial performance in the last six years, strengthened by revenue growth in digital as well as licensing and conferences.  As a result of your tremendous work, we have received more than a few “over the transom” indications of interest to buy Forbes Media.  The frequency and serious nature of these overtures have brought us to a decision point.  We’re organizing a process to test the waters regarding a sale of Forbes Media.  We have hired Deutsche Bank to represent us, and we expect interest from numerous suitors.I’m proud to say that we’ve accomplished what no other traditional media company appears to have done: established a huge digital audience by efficiently creating quality content at scale, and we’re innovating around new business models to maximize that relationship.  In the last three years, our unique visitors to Forbes.com have jumped from 12 million to 26 million, according to comscore worldwide.  Digital revenues are expected to increase over 25% by the end of the year.  In print, through September, we continue to be the share of market leader in our competitive set.  Our efforts have also focused on diversifying our revenue streams to complement our advertising-based businesses – and many of our initiatives have come to fruition this year.

I will share more details about the interest in our company as events unfold; however, I was eager to inform you before you hear about this news elsewhere.  If you receive any inquiries from the press, forward them to Mia Carbonell in Corporate Communications.

We will have an open conversation about our company at our next Town Hall meeting early next year.

Best,

Mike

Forbes cover Blakely

Forbes parent exploring a sale

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Forbes Media, the parent company of the business magazine Forbes, is exploring selling itself, reports Alex Sherman, Jeffrey McCracken and Edmund Lee of Bloomberg News.

Sherman, McCracken and Lee write, “The New York-based publisher of 96-year-old Forbes magazine and Forbes.com is working with Deutsche Bank AG on the sale, according to a memo sent to the company’s employees. Forbes is seeking at least $400 million, said a person familiar with the matter who asked not to be identified as the information is private.

“Magazine publishers are selling storied brands as they struggle with declines in advertising revenue and circulation amid competition from the Internet. Newsweek, the 80-year-old publication, was sold to IBT Media in August by IAC/InterActiveCorp, and McGraw-Hill Cos. sold Businessweek, which was founded in 1929, to Bloomberg LP in 2009. Maxim magazine, the bawdy men’s title, was sold to Darden Media Group by its creditors in September.

“Bloomberg LP, the New York-based news and financial information provider, is the also the parent of Bloomberg News, which competes with Forbes.

“Editions of the magazine are published in Asia and Europe. Its U.S. advertising sales were $275 million last year, down 19 percent since 2008, according to the Publisher’s Information Bureau.”

Read more here.