Dow Jones Finds Online Valuations Too High; TheStreet.com Hasn’t Scaled Enough

Dow Jones is looking for more MarketWatch-like acquisitions…this much is public, as WSJ publisher and Dow Jones EVP Gordon Crovitz said at our NYC mixer last week. Now Reuters is reporting that at the CSFB conference last week, CEO Rich Zannino said, “We’re not that optimistic that we’ll find transactions [in the online space]. You look there and you see some of the valuations, it’s like it’s 1999 again.” An ideal multiple would be 12 times next year’s pro forma EBITDA, Zannino said.
When asked if TheStreet.com would be a good fit, he said, “We’re looking at things that have greater scale potential…. They’ve done a really nice job of building their business, but it hasn’t scaled on the Web that much.”
Also, coincidentally on TSCM, a story about a town hall-style meeting that DJ CEO did with employees on Monday. Zannino cited NBC as a company that’s having more success adapting to the digital age than its newspaper counterpart, New York Times. “The least instructive has got to be what The New York Times is doing,” said Zannino. “You can’t just sit there and ignore [the changes in the media industry] . That appears to be what they’re doing.”

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