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Gizmodo Media Group (formerly Gawker Media) and The Onion web sites are for sale, reports Sam Machkovech at Ars Technica,just two years after Univision purchased them as part of plans to beef up its revenues prior to an IPO.
Univision acquired Gawker Media by outbidding Ziff Davis with its $135 million offer in August 2016. Days later, Gawker.com shut down in the wake of successful litigation by Terry “Hulk Hogan” Bollea over the site’s report on his mid-2000s sex tape.
There have been reports that layoffs will be made at The Onion and its future is in doubt if a sale is not made. Univision said it intends to concentrate on its core strength: Serving US Hispanic markets. Univision said The Onion will have “greater opportunities to grow under new ownership.”
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Foremski’s Take: This is yet another example of how tough it is in the media industry. It shows that even “digital-first” media organizations are finding it hard to survive, yet they were doing all the right things — all the online things that traditional media companies generally haven’t done yet but plan to do.
They are in trouble because the value of online advertising continues to plunge and huge amounts of ad fraud are further hurting media companies.
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Media companies in television and in print still have a legacy advertising business that is not declining as fast as digital ad revenues.
This constant decline in the value of an online advert is best seen in Google’s quarterly financial results. Every three months $GOOG reports a 15- to 10-percent drop in revenue per click.
This happens every quarter, but Google manages to find new places to show more ads, so it often beats Wall Street estimates.
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But this is not a strategy that other media companies can use to survive. More disruption is coming.
When it comes to The Onion, its future seemed limited even without the dismal economics of the media industry. Its headlines and stories used to be funny because they clearly could be identified as satire, but these days it is reality that seems like satire.
For example, this recent AP story in which a US immigration judge tries to question a one-year old infant in court :
“I’m embarrassed to ask it, because I don’t know who you would explain it to, unless you think that a 1-year-old could learn immigration law,” Judge John W. Richardson told the lawyer representing the 1-year-old boy.