Journalist-free Flipboard valued at nearly half of New York Times Co.

Journalist-free Flipboard valued at nearly half of New York Times Co.

Summary: It's a disadvantage for a media company if you have to employ, journalists, editors, and photographers...

TOPICS: Start-Ups

Kara Swisher reports that Flipboard, the online news magazine app, has raised $50m at a $800m valuation, which is almost 50% of the market cap of The New York Times Company at $1.75 billion.

Flipboard produces no content of its own, harvesting all text, photos, and videos from the Internet.

Exclusive: Flipboard Raises $50 Million More on $800 Million Valuation - Kara Swisher - Media - AllThingsD

According to sources close to the situation, Flipboard has raised $50 million in new funding, in a round led by Rizvi Traverse Management and Goldman Sachs….In addition, sources said, current investors, including venture firms Kleiner Perkins and Index Ventures, are also participating, while Insight Venture Partners is taking an even larger stake in Flipboard.

Flipboard’s last round of funding was in mid-2011, when it raised $50 million at a $200 million valuation. That came after a $10.5 million initial round.

The valuation of Flipboard is an example of a Silicon Valley media company that produces no media content of its own. Its revenues come from advertising placed on its app which collects content recommended by the social networks of its users. Its revenues are not disclosed and it employs less than 200 people.

The New York Times Company  [$NYT] publishes two national newspapers plus 16 regional newspapers. It also owns eight television stations and two New York radio stations. It operates more than 40 web sites. It has 5,363 staff and 2012 revenues of $2 billion.

Clearly, if you have to pay for your content you are at a significant disadvantage in the new media industry as the valuation of Flipboard demonstrates. 

Topic: Start-Ups

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  • All valuation of Flipboard demonstrates

    Is that people will do short term investments in the hopes of making big bucks after the company they invested in is bought by a Google or somebody.

    It doesn't mean that they see it as a long term entity or something game changing.
    William Farrel
  • "The Internet Devalues Everything It Touches"

    So said former ZDNet blogger Dana Blankenhorn.

    The reality is, the only thing people were paying for in pre-Internet media was the distribution channel, not the content. It was the newspaper publishers and TV networks that were the sustainable businesses, not the journalists and commentators that they employed.

    Now the Internet is the ultimate distribution channel. It is not killing the journalists and columnists and content creators per se, it is killing the businesses that used to employ them.

    Content is just as valuable as it always was. It was never what we were paying for.
  • Creative Destruction

    Expectations concerning growth have always been a component of company valuation. The New York Times company is big and has a lot of assets, but it is not growing. In fact it is going slowly out of business. Especially in a world where "soak the rich" politicians are in favor, investors will greatly favor the prospect of capital gains over current profits and dividends.

    I also agree with ldo17 that a lot of the value in newspapers was in the form of distribution. If I think back to when I last subscribed to a dead-tree newspaper, a lot of the stuff I wanted from it was not created by the newspaper. The movie schedules, the sports scores, the stock prices, the weather forecast... all that stuff was just being distributed by the paper, not created by them. Today I get the same stuff off the Internet, and I don't subscribe to a newspaper.

    What I like about Flipboard is what it =doesn't= have. It doesn't have editors who decide for me what stories are "news" and what stories I don't need to know about. With Flipboard I'm my own news curator.

    When Murdoch launched "The Daily" for the iPad, I subscribed to it. That was partly just to see it, but I also wanted to encourage the experiment. It really was a first-rate attempt to create a daily newsmagazine for mobile devices. It had flash and style and terrific graphics and artwork, and it took advantage of the iPad well.

    In spite of all that, within a month or so I had stopped looking at it and was back to Flipboard. Why? Because I just didn't like somebody else collecting my news for me. I'd gotten spoiled by Flipboard and some similar things. I decide what subjects I want to hear about, and from which sources. Does it really matter which organization sends a reporter to Jay Carney's press briefing if all we're going to get is Jay Carney's talking points anyway? Heck, I can get those from the White House web site. So can Flipboard. If journalists are going to act like a distribution channel, they'll be treated as one. Which today means they had better be willing to operate at the speed of light for pennies per hour.
    Robert Hahn