Half Price Gizmodo Flogged After Racking Up Big Losses
Loss making tech media Company Gizmodo which also includes Lifehacker is set to be sold for less than half what it sold for in 2016.
In 2017, the Gizmodo Media Group sites—which were then part of Univision unit called Fusion Media Group—generated more than $80 million in revenue, but still lost $20 million. This saw Univision take an impairment charge on Gizmodo Media Group of more than $120 million in 2018.
Since 2017 the media group has continued to lose money. Their brands include Lifehacker The Onion, Jezebel, and Deadspin.
Now private-equity firm Great Hill Partners is set to have a crack at trying to turn the struggling tech media group around. The equity firm has acquired the Gizmodo Media Group from Univision Communications.
The discounted purchased price has not been announced.
ChannelNews understands that it is half of the US$135 million Univision paid in 2016 to acquire most of the Gizmodo properties.
James Spanfeller, the former chief executive of Forbes.com and president of consumer magazines at digital publisher Ziff Davis, will become chief executive of G/O Media, a new company created from the assets.
Most technology media Companies are struggling to compete despite generating tens of millions of clicks every day.
Mic Network, which had raised more than US$60 million in venture funding over several years, sold to Bustle Digital Group last year for about US$5 million. Mashable, which was once valued at $250 million, sold to Ziff Davis for around $50 million in 2017.
Spanfeller told the Wall Street Journal that he “sees promise in the assets” however he has failed to outline how he will start making a profit from the struggling businesses.
“G/O Media is already the leader among digital media companies speaking to the 18-to-34-year-old market, and we are confident and excited to see that lead expand,” Mr. Spanfeller said in a statement.
He claimed that he hopes to bolster the company’s profit margins from automated or “programmatic” advertising sales, targeting marketers who are seeking brand-safe content and high-quality audiences that are difficult to find elsewhere, the person said.
According to sources a big problem for the group is that mainstream media Companies such as News Corporation and Nine Entertainment are now targeting the technology category delivering content across their TV, radio and online operations.
A recent Standard Media Index Report in Australia revealed that Communications and Technology were two of the biggest growth categories for media Companies in Australia.