Why Are Meredith and Gannett Getting Social Now?

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I’ve been joking a lot lately that you’re better off working in a building where the windows don’t open, lest the headlines make you want to jump out of them. But in a break from the dirge-like background drone of massive layoffs and revenue declines, two recent news stories jumped out at me because they didn’t fit that mold: One about Gannett buying a company called Ripple6, and another about Meredith taking a minority investment in the RealGirls Media Network.

Neither Gannett nor Meredith have exactly been immune to the decline in the economy. Gannett, in fact, is in the process of laying off 10 percent of its employees, or 3,000 people, and Meredith has had its share of staff cutbacks as well.

So why would they be in acquisition mode? Both Ripple6 and RealGirls are social media companies, and, despite the economic malaise, social media tools are increasingly considered a must-have for media companies — even at a time when many reporters, editors and ad sales people are considered expendable. To those in the content-producing business, maybe the headlines trumpeting these deals are depressing at a time when so many publishing jobs are in jeopardy. However, like it or not, we are rapidly moving into a world in which all Web sites will be social, because online users want to express their opinions, no matter where they are on the Web. You can thank MySpace and Facebook for creating this demand.

Neither Gannett’s acquisition nor Meredith’s investment were big enough to be material to either company. Despite Facebook’s estimated $15 billion valuation — at least pre-financial crisis — most social media companies just aren’t that pricey. Despite the chaos all around, now’s the time to get in.

Tags: Media Company, Social Media, Gannett Co. Inc., Meredith, Mergers & Acquisitions, Corporate Law, Advertising & Promotion, Investment, Finance, Business Operations, Marketing, Catharine P. Taylor

Catharine P. Taylor has been covering digital media and advertising for almost 15 years and is a frequent speaker at conferences about media and advertising. She posts daily to BNET Media, writes the weekly Social Media Insider column for Mediapost and also has her own advertising blog, Adverganza.com. Follow her on Twitter or subscribe to the BNET Media Twitter feed.

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richullman

11/24/08 | Report as spam

RE: Why Are Meredith and Gannett Getting Social Now?

Hi Cathy,

You've hit the nail on the head: all web sites will be social. News, information, entertainment... every one of them.

But I'd go beyond just Myspace and Facebook as the reasons for the demand, and beyond just online users who want to express their opinion. People want to express their opinion no matter where they are (even if its throwing a brick at the TV set); technology has simply made it much easier for them to actually voice it.

People's (users') bigger desire, however, is to connect with like-minded people and to get information that they can trust. They might get it from mass reach (online) vehicles, but they can't always be sure to trust it, and they certainly will have a harder time connecting with people. They need smaller, more personal communities for this to happen.

When publishers deliver more personalized experiences... where their audiences can connect and form personal networks... and when those audiences can create and share content in those networks, publishers will have very valuable resources. These are new kinds of media properties. They are valuable for the audience, for publishers, and for marketers too.

Ripple6's ability to help publishers and marketers do this (now and in the future) is a critical driver behind Gannett's acquisition, and why Meredith too is deploying our technology in MixingBowl.com.

And we're happy to be doing it.

Rich Ullman
svp
Ripple6, Inc.