The NYTimes could be worth $19bn instead of $2bn
mondaynote.com
mondaynote.com
NYT might have great revenue (it does), but it also doesn't have as much growth potential as Buzzfeed. They have fewer new markets to reach and less segments to expand into. Probably the only big financial upside they have is in cutting legacy print costs.
Of course, this same growth-based analysis also applies to Facebook/Twitter vs Google. They're both much younger businesses than Google and presumably have lots of growth available in both users and advertising effectiveness. Google, on the other hand, has been selling ads since before Facebook even existed. Thus, it's easy to make a case for Google having reached it's peak while Facebook has room left to grow.
Also, any analysis which conflates newsroom uniques with service users is basically useless. The average content "unique user" reads a few articles a month (if you're lucky), but the average user of a service like Facebook logs in multiple times a week. This is one of the key reasons that VCs prefer technology companies to media: users have much more of a regular relationship with their users. If the NYT shut down tomorrow, the majority of their 57 million visitors wouldn't even notice. But if Facebook shut down tomorrow, it'd be on TV: hundreds of millions of people would notice.
That being said, I do agree with the premise that the NYT is undervalued. They've made tremendous strides at improving their digital operations over the past few years (especially in 2014) and have also realized that serious investment in technology is critical to remaining positive. If nytimes.com were exactly the same as it is today, with the same team & investments, but had been founded as a startup a few years ago I bet they'd have a $10b valuation at least.
Between this article and the Calacanis one about Apple buying Tesla, SV people don't seem to understand the basics of how or why publicly traded companies are valued how they are. Revenue or earnings multiples are not 'given' to a company like an award, they are the result of how a great many investors perceive the risks and upside of a company (among many other things). For a company's multiples to change, perception of the issues surrounding a company would have to change. So just saying "if it's multiple could be X" without getting into the issues why the multiple is something else, or what would have to be done business-wise to get it there, is pretty useless "analysis" and makes the differences between one company and another (and how they are perceived) seem much less than they really are.
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Sure Twitter and others have a significantly higher valuation, but they also have expectations (and I'm not sure I agree) for significantly higher growth potential and future earnings.
There's also the possibility that BuzzFeed et al. are proportionally overvalued, which seems like it's probably the case in some instances, but the argument you're making if "valuation >> revenue - costs" is that the right hand side of the equation is accelerating in a way that justifies the left hand side.
Can someone please clarify this for me?
Twitter is admittedly more membership based, but they still have millions of people viewing tweets (especially embeds) without an account.
Facebook is indeed primarily a logged-in experience, but if you look at the numbers you'll see that uniques are less than members. So it's essentially a measure of how many members actually visited that month.