

The NYTimes could be worth $19bn instead of $2bn - shahocean
http://www.mondaynote.com/2015/02/15/the-nytimes-could-be-worth-19bn-instead-of-2bn/

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morgante
This analysis misses out on the importance of growth in establishing
valuations.

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.

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thesimpsons1022
android phones still have a lot of room to grow though, so its not quite a
pessimistic outlook for google.

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morgante
Right. And that's why their P/E is 27.08, which is still higher than average.
For example, Microsoft's is 17.70—showing that the market estimates it has
significantly less growth potential than Google (which I agree with).

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allworknoplay
Ugh. I sincerely hope investors do not force the NYT to shutter its newsroom
operations and become buzzfeed.

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pcurve
I'm watching Bloomberg.com. With their recent redesign, its front page
headlines have also become a lot more Buzzfeed-like.

Does a Real Anti-Aging Pill Already Exist?

Five Ways That Apple Is Already Positioned to Be a Car Company

Why Are We Still Making Buildings Without a 13th Floor?

This Restaurant Turns Diners Into Lab Rats

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allworknoplay
but think of the shareholder value!

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Gustomaximus
The key point I didn't see mentioned is potential for growth.

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.

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cat9
The traditional response if you firmly believe a stock is undervalued by a
factor of > 8.6 is to buy as much of it as your finances will bear, then sit
on it. It would be interesting to see whether the author does so.

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.

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_almosnow
I don't understand what is "membership" in sites like Google/Twitter/Facebook.
I thought that it could be when you have an account in there vs you don't; but
how then can you be a "non-member" at Facebook, for instance.

Can someone please clarify this for me?

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morgante
Many people regularly use Google without signing in.

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.

