Friday, March 21, 2014

Newspapers sell their digital sites

Last January, the Guardian sold for 985 millions dollars its very profitable website of cars digital sales. This month, the various American press groups that own are putting it on sale for 3 billions dollars. It means, for instance, that Gannett, the largest American newspapers group will reap 810 millions and Mc Clatchy, 750 millions.

Any expert of the news industry will wonder why ailing newspapers facing a permanent reduction of sales and advertising and bound to move, as quickly as possible into the digital age, are selling their more profitable assets, losing copious dividends and ad market advantages.

To this obvious question, the Guardian states that it intends to invest on a grand scale into the digital services of the daily, hoping in a few years to turn its digital branch into a profitable venture.

It seems that the American groups expect to ease their pulling out of the print industry by using this huge amount of cash to buy into television networks. This way, Gannett and Tribune could drop their dailies and become prosperous TV and Internet  businesses. The case of Mc Clatchy is a bit different as they seek to get rid of their debts, maybe to sell later on their print activities.

What does it mean? The most likely answer is that the owners of the press industry, following the example of the Graham family, are giving up on their print business and moving to more promising fields, Internet but also television which is still highly profitable if well managed.

At the same time, many young people, helped by wealthy sponsors try to figure out the future of the news industry. They are the Gannett and Tribune of to morrow.