Hearst made its second major acquisition in two months, shopping community tool Kaboodle, for a sum of $30-40M. Last month it bought UGO. While the initial thinking is that these are all new forays into new media, truth is Hearst is stacked in web companies. Judging by their corporate page, their investments in new media include:
Brandwise, Inc.
Brightcove
Broadcast.com
CirclesCurrent
Cymfony
Double Fusion
drugstore.com
E Ink
Exodus Communications
Gather
Genealogy.com
govWorks
Idilia
I Pro
iVillage, Inc.
Hire.com
Jingle Networks
LiveWorld
Medscape
MetaTV
Mobility Technologies
MobiTV
Netscape
The NewsMarket
NR2B Research
Pandora
Referral Networks
Scene7
SlingSphere
StarMedia
Tavolo
USDTV
WideOrbit
XM Satellite Radio
Zip2
Obviously some of their investments fared better than others, the thing to note is when you invest, the revenues and profits (if any) are not consolidated onto your financial statements, so only when there is an exit would Hearst really materialize any gain. Of course, investing in the right company can provide amazing extraordinary returns, but when your core business in print and peripheral units such as broadcast TV are being attacked by the shift of consumers and advertisers’ budget online, I think it’s clear that Hearst need to get a lot more aggressive online.
That’s the key nuance: what is happening now is that Hearst is taking on more of an operational role: UGO was the first, clearly Kaboodle will be used to bring the clients in Hearst’s magazine to life online… but even without that print-to-web tie-in, for Hearst to ride the commerce opportunity online is not a bad thing at all.
Time will tell what Hearst will morph into online, Kenneth Bronfin seems to be the man of the hour at the venerable publishing empire.
Subscribe: