Monday, December 01, 2014

Vox Media raises $46.5M at a $300M valuation

Another web content business, Vox, raised $46.5M at a $300M valuation from General Atlantic, a blue-chip private equity firm. In the wake of other big prices paid for similar firms such as Buzzfeed or Reddit, the question becomes why? Content businesses don’t scale and are dinosaurs of the past right?

Kind of, but not really. The digital media businesses that win in this competitive market are not only generators of compelling content, but they are high end technology firms at their core. Vox, for instance, has a sophisticated content management system that enables streamlined content creation and curation while maximizing user engagement. Buzzfeed has sophisticated algorithms that can predict pageviews with a high degree of accuracy, and it is constantly iterating which pieces are promoted and pushed to the top of the funnel. The result of the pageviews, of course, is ad revenue, which has some pretty attractive margins once the publisher reaches scale. So as you see money funneling into content businesses, realize that they aren’t the same content businesses of the past. They are highly sophisticated technology businesses that have become experts at utilizing their tech stacks to monetize the mountain of digital content better than anyone else.

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