|August 27, 2012|
|Diller Removes Pinch's Albatross|
|By Kevin McCauley|
|Media mogul Barry Diller has removed the About.com albatross from the neck of New York Times Co. chairman Pinch Sulzberger for a cool $300M, a princely sum for the information site that is on the decline due to Googleís reworking of its search algorithm. |
Revenues for the NYTCís About Group tumbled 8.7 percent to $25.4M during the second-quarter due to drops in both display and cost-per-click advertising. The About operation posted a $186 operating loss following a big write-down for goodwill.
The best Sulzberger could say about Aboutís woeful performance: ďWe expect it to be on track to post continued meaningful improvement in the second half of the year.Ē Thatís hardly an inspiring statement.
Possessing a flair for the dramatic, Dillerís IAC swooped in to top a $270M offer by Answers.com, a Q&A site run by a pair of private equity firms. Diller flashed cold cash at Pinch, compared to the risky debt and equity package put together by Answer owners TA Associates and Summit Partners.
The last thing Pinch wants to do is to prolong the agony with About, for which he shelled out $400M to acquire in 2005, via an equity relationship.
With the unloading of About and Fenway Sports Group (Boston Red Sox) the Times is a pure newspaper media play consisting of its New York City flagship, International Herald Tribune, Boston Globe (for now) and Worcester Telegram & Gazette (ditto), which makes it a tempting takeover target.
Perhaps, Pinch could persuade Barry to take the Times private. The price of the Times Co.ís 148,000 shares, which currently trade at $9.17 each, is nearly $1.4B. Thatís chump change for Diller, who certainly would allow Pinch to stick around.
It would be a good legacy for Sulzberger, a much happier outcome than a hostile bid by Rupert Murdochís News Corp.ís new newspaper company, consisting of the anti-Times Wall Street Journal and New York Post. It would be Rupertís finest hour.
Perish the thought!
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