Digital giants get bigger at the expense of the small blog sites
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How huge is the market now? Well, three years ago, AOL bought the Huffington Post for $315m (£200m), after the site posted 2010 revenues of $30.7m (£19.7m). That was a huge deal, which cemented HuffPo’s top-dog status. Today, by contrast, both figures look downright modest.
Nick Denton, founder and owner of Gawker Media, recently revealed his company has $60m (£38m) in revenues. The man Denton considers his arch-rival, BuzzFeed boss Jonah Peretti, has already seen his 2014 revenues surpass $100m(£63m), and is giving each of his 700 employees an Apple Watch to celebrate. He can afford it: he raised $50m (£32m) in new venture capital this summer, from a single investor, at a valuation of $850m (£541m).
And that’s just the start. Business Insider raised $12m (£7.6m) in March, at a $100m (£63m) valuation, after Mashable raised $13m (£8m) in January. Vox Media raised $46.5m (£29.6m) in November, at a valuation of $380m (£242m).Automattic, the owner of Wordpress.com, raised $160m(£102m) in May, valuing the company at $1.16bn (£738m). And then, dwarfing all the others, Vice Media raised an eye-popping $500m (£318m), in a deal which valued the company at $2.5bn (£1.59bn). What’s more, founder Shane Smith is now telling anybody who’ll listen that he’s going to have $1bn (£630m) in revenues in 2015, which makes the valuation almost seem modest.
In my opinion, this again shows the Marxist values in regards to online firms, as only the big survive. This means there is a lot of control by the giants and they can buy those smaller firms, or kick the out of the market by using revenue to invest in research and development.
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