IAC rolled out Dotdash this week. Small piece of the company, but a profitable digital media company is rarer than a profitable unicorn.
They positioned themselves as "Need to know" content, vs "Nice to know" or "Want to know"
They positioned themselves as "Need to know" content, vs "Nice to know" or "Want to know"
Dotdash has done a nice job growing audience of its brands
Dotdash has much larger competitors in each of their verticals, so presumably room to continue their growth
The financial profile is interesting. They will do $40M in EBITDA on $165M in revs this year. To generate that, they will spend $35M investing in content.
I've long been intrigued by Buzzfeed, because they are so good at what they do and staying ahead of trends. But they did $300M in revs in 2018, up 15%, but with 1350 employees. Vox was $185M in 2018, up 15%, with 1000 employees. Those are tough models.
Dotdash ain't Buzzfeed news, and I'm not trying to make a spurious comparison. Both Vox and Buzzfeed do great work. But the internet is ruthless competition, so it's always interesting to see what models can actually make money and grow.
You can also buy Dotdash on sale today for -$900M, so it's almost a negacorn
Worth highlighting this great answer the CEO @neilvogel, who I just found out is on Twitter, gave Kara Swisher about what it was like pitching Diller on the plan for taking About and turning it into Dotdash. Speaks highly of him, but also love how IAC was like great, how fast?
What they did with About, rebranding, taking the traffic hit, and investing into the biz, reminds me of what @brandonridenour and Chris Terrill did with the Servicemagic to Homeadvisor rebrand. Took big traffic, rev, ebitda hit, with IAC support, and that worked out pretty well.
Buzzfeed growing single digit percent in 2019. Based on rough estimates of prior years revenue, it looks like affiliate links and product licensing has tripled over the last 2 years and accounted for 75%+ of revenue growth.
WSJ confirming that Buzzfeed will do around $320M in 2019 revenue, up 7%. Has grown high single digits the last 3 years. Slightly unprofitable, but forecasting profitability for 2020. wsj.com/articles/buzzf…
Always more interested in where Buzzfeed is headed, as they have to continuously reinvented their business model and tried to surf emerging trends. Commerce, affiliate links, retail (!), lead gen, and membership models now on the radar.
As I've said, I'm impressed by Buzzfeed's ability to successfully adapt, but I think that is a really hard sustainable advantage, and why despite being arguably the best at what they do, they're a single digit grower.
Good overview of Dotdash h/t @LennyIce fastcompany.com/90430104/how-d…
