Press reports of Bloomberg’s purchase of Business Week seem largely to miss the point. The Wall Street Journal story this morning, for example, sees McGraw-Hill’s desire to shed the title as part of a pattern of publishers "closing print titles and slashing investments in traditional publications, a sign they don't expect these businesses to return to strong health as the economy recovers."
Well, duh. But that doesn’t address the question of why Bloomberg would want to buy it. Why, in this case, is one publisher’s trash another publisher’s treasure? The company spin, somewhat curiously, is that Business Week will give Bloomberg access to politicians and corporate executives it now can’t reach, evidently because it’s perceived as some shabby little wire service.
There’s undoubtedly some truth to that, but it seems unlikely that Bloomberg would spend a presumed $15 million ($5 million for the purchase, $10 million in liabilities) so they can get an interview with Tim Geithner.
No, I think the real motivation behind the buy is Businessweek.com. Yes, Bloomberg will probably keep the weekly magazine, using the ugly name Bloomberg Business Week. It will slash the staff, and probably try to find a way to repurpose Bloomberg material in its pages.
But with Businessweek.com, Bloomberg is getting a Web site with lots of readers and lots of upside potential. According to compete.com, Businessweek.com has more than 5 million unique visitors a month, about as many as Bloomberg.com. And those figures are probably low because of Compete’s tendency to undercount; I imagine the real number is closer to 8 million uniques. That in and of itself is a viable business, and at $15 million is a major bargain. Consider that last year, Guardian Media bought PaidContent for $30 million, and that site has a monthly audience of maybe 250,000. Yeah, OK, PaidContent has other businesses, and Guardian clearly overpaid, but I’d say Norm Pearlstine and Bloomberg have just snatched up a major player in the online business journalism world for a song, and hardly anyone has noticed.