[HN Gopher] Axios Sells for $525M
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Axios Sells for $525M
Author : jbegley
Score : 129 points
Date : 2022-08-08 14:05 UTC (8 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| guywithahat wrote:
| Another article not behind a paywall
| https://nypost.com/2022/08/08/axios-sold-to-cox-enterprises-...
|
| And the WSJ's take on it, which is behind a paywall but is
| probably the best one I've seen
| https://www.wsj.com/articles/axios-to-be-acquired-by-cox-ent...
| upupandup wrote:
| thought this was the npm axios lib and thinking why it would cost
| that much
| monkpit wrote:
| I always wonder if they are related or not?
| rickstanley wrote:
| I hope they don't change the way Axios is structured today. No
| overwhelming ads, simple layout, fast reading texts, good
| summary, etc. I used it as a "role model" for a local news
| website that I built in 2018. Took inspiration from Axios and
| tagesschau (https://tagesschau.de).
| rchaud wrote:
| Someone just spent big money on it, and they're going to want
| to make that back. Advertising is the obvious way, so enjoy
| current Axios while you can.
| Barrin92 wrote:
| >and tagesschau
|
| for English speakers there's https://www.dw.com as well which
| explicitly writes for an international audience.
| snowwrestler wrote:
| > Cox Enterprises is not buying out HQ, which Axios is spinning
| out into a separate company. Mr. Schwartz will be chief executive
| of that company and Cox will take a minority stake, with Mr.
| VandeHei serving as chairman, one of the people with knowledge of
| the deal said.
|
| Interesting. HQ probably has more upside than the media business
| long-term. Think Grammarly crossed with Mailchimp.
| keepquestioning wrote:
| Very interesting. No one talks about news startups, but there's
| endless talk about SaaS startups doing glorified log parsing.
|
| Another one to watch is Semafor.
| rchaud wrote:
| There's been plenty of discussion here about Vice, Buzzfeed,
| Substack and all the other 'new media' startups.
| bpodgursky wrote:
| Well, for better or for worse, $500mm wouldn't even be worth
| mentioning as a tech exit (unless it came as a fire sale after
| a unicorn fundraising round).
| neonate wrote:
| https://archive.ph/GyLbL
| personjerry wrote:
| Really interesting to me. I built an AI news summarization
| service around three years ago and discovered Axios as a
| potential competitor. At the time they were still defining
| themselves; I still have a (no longer functional) TestPilot
| version of their app on my phone.
|
| With the polish of their services and the big money behind them,
| they seemed like an obvious win. It felt like they understood the
| same thing I did - Bottom Line Up Front is the key to capturing
| the next generation of young professionals reading the news. But
| it's interesting to see that they've sold at less than a billion
| dollars - it seems like their experiments were running out of
| steam, and it makes sense too with the tech industry downturn
| that they must be facing pressure to cash out.
| afavour wrote:
| I don't see the value Axios provides, personally. It's another
| Politico, made by Politico alums. Good for them that they get
| rich I guess but I can't say I feel richer for Axios existing.
| [deleted]
| elicash wrote:
| I'd imagine they provide access to an even higher income
| audience. So, bigger CPMs for investors, for example.
| AzzieElbab wrote:
| Politico aint got s..t on this
|
| https://www.axios.com/2022/08/08/trump-toilet-photos-maggie-...
| threatofrain wrote:
| Politico and The Hill are focused on Washington-relevant
| gossip. Axios is general news coverage in bullet points and not
| just for policy wonks. They also had high profile live
| interviews.
| Invictus0 wrote:
| Weird to phrase it as "Axios agrees to sell itself" rather than
| "Cox buys Axios"; I guess NYT thinks no one has heard of Cox.
| smt88 wrote:
| I actually don't think it's common knowledge that Cox is a
| conglomerate with multiple unrelated businesses. Most people
| would know them as their ISP, and that's not even necessarily a
| huge portion of the country.
| Kye wrote:
| This is honestly the first I've heard they're more than a
| cable company.
| rjbwork wrote:
| RIP. Was good while it lasted.
| e-master wrote:
| I really liked it at first, especially when I was able to just
| expand the news item with a single click. Then they changed the
| UI so that you had to open a new page for each item and it
| basically ruined it for me, after that I pretty much stopped
| reading them.
| brainzap wrote:
| people are just gonna switch to native fetch
| qualudeheart wrote:
| Can we get a quick rundown on native fetch?
| driggs wrote:
| Axios on Axios:
|
| https://www.axios.com/2022/08/08/axios-agrees-to-sell-to-cox...
| freediver wrote:
| Refreshing to see this much transparency.
| pphysch wrote:
| snapcaster wrote:
| I don't really consume Axios, can you bring up a couple
| examples?
| pphysch wrote:
| The "China Files" were a stunning example of misinformation
| and journalistic malpractice. Read through the leaked
| documents Axios released and corroborate with their
| editorialized conclusions. Absurd amounts of spin.
| Coincidentally, the editor of this propaganda is a notorious
| racist.
| missedthecue wrote:
| Who is the editor?
| pphysch wrote:
| Bethany Allen-Ebrahimian
| DoctorOW wrote:
| I googled her... couldn't find any evidence of your
| claims.
| theduder99 wrote:
| case closed!
| creato wrote:
| The burden of proof here is on pphysch. If he or you want
| to be taken seriously, point to something specific.
| bena wrote:
| pphysch wrote:
| Please drop the hysterical ad hominem. Despite your attempt
| at projection, this is actually against HN's policies.
| Knock it off.
| bena wrote:
| The best I could come up with regarding the example you
| alluded to was this:
|
| https://www.axios.com/2019/11/16/china-detention-uighur-
| musl...
|
| And it seems that they agree that what China did was bad.
|
| So if it's not that, then what are the "China Files"? And
| how are the "participating in an economic destruction
| campaign against millions of Muslims"?
|
| You realize these are really bold claims and require more
| than just a "trust me, it's bad" from you, right?
| pphysch wrote:
| > And how are the "participating in an economic
| destruction campaign against millions of Muslims"?
|
| Part of the broader disinformation campaign culminating
| in e.g. H.R.1155 which was passed last year.
|
| Goal: destroy the economy of Xinjiang so that it becomes
| a terrorism hotbed a la neighboring Afghanistan: the
| Brzezinski playbook. It worked against the USSR, right?
| formerkrogemp wrote:
| Fox news? Breitbart? OAN? I don't think Axios has been a bad
| source of news.
| txsoftwaredev wrote:
| i_haz_rabies wrote:
| One positive does not erase a litany of negatives
| stingraycharles wrote:
| Not saying you're wrong, but it would help if you provided some
| source of what you believe is all this heinous misinformation.
| humanistbot wrote:
| The most heinous misinformation you've EVER SEEN? That's a
| pretty big claim, unless you're just prone to hyperbole.
| pphysch wrote:
| Yeah. It's especially heinous because they released it
| alongside a cherry-picked subset of "smoking gun" leaked docs
| that actually discredit their a priori conclusions.
|
| They're saying "we know our readers are too gullible to check
| our claims".
| humanistbot wrote:
| You still haven't said what example from Axios you meant.
| But compare it to Alex Jones' and Infowars' claims that the
| shooting at Sandy Hook was a staged false flag operation
| and the parents of dead kids were crisis actors. Texts from
| the trial show that they knew what they were doing.
|
| If you aren't familiar with this case, you might want to
| take a look at it and see how it ranks in terms of
| heinousness.
| pphysch wrote:
| Yes I have, please look at the rest of the thread you are
| replying to.
|
| Alex Jones harassed and defamed several people, very
| seriously. Axios is participating in an economic
| destruction campaign against millions of Muslims. Not
| really comparable.
| spywaregorilla wrote:
| I don't have any particular thoughts on Axios' credibility, but I
| love their presentation style. It's really the news style guide
| that I always wanted
| rchaud wrote:
| Don't get too used to it. The ads and upsells are about to
| increase 10 fold now that they've been acquired.
| criddell wrote:
| Just a few years ago, Bezos bought the Post for half that. I
| don't understand how any of this stuff is valued.
| mbreese wrote:
| The Axios newsletter first model is pretty good. They have
| direct access to subscribers without the baggage of actually
| printing anything. They've also done a good job of matching
| news content to attention spans. You get bullet points for the
| news with the ability to followup on what you want.
|
| It does mean that it's not as good for long-form journalism,
| but that's not where the market is headed (for better or
| worse).
|
| One of the other areas where Axios was moving (and where I
| think the valuation is coming from) is that they have expanded
| their DC insider model to more local sources. In an era where
| local news is struggling, having a setup for high quality local
| news without the overhead of a physical paper is great.
| esel2k wrote:
| Is the reason for the value based the good usability, the
| user base or the content that is existing? I wonder as I am
| leading a content platform and was asked to think if we
| should sell it, but totally inexperienced in this.
| peytoncasper wrote:
| I'd be interested in others take. However, I have to
| believe there are really only a few things that matter in
| deals like this.
|
| 1. Existing user base
|
| 2. Subscription price
|
| 3. Churn rate
|
| 4. Growth rate
|
| Maybe the content ranks somewhere in there, but I doubt it.
| Primarily, because objectively you should be able to judge
| the content based on the metrics above.
| scifibestfi wrote:
| The broad money supply increased 2x since he bought it in 2013.
| That could explain a lot of it. Today it would take $500M to
| have the same purchasing power as $250M did then?
|
| https://fred.stlouisfed.org/series/M2SL
| onlyrealcuzzo wrote:
| Everything is valued based on growth - because capital gains
| tax is so much lower than income tax.
|
| Share buybacks make this a lesser issue for megacap stocks with
| massive profits and margins.
|
| When you're talking about two companies with small profit
| margins and profits (or negative profits / losses) - if Company
| A is growing much faster than Company B - the valuation
| comparison might seem ridiculous.
|
| Here's a spreadsheet that makes it clear why the multiple on
| growth is so high when you consider tax and inflation:
| https://docs.google.com/spreadsheets/d/1Q00Y8PEyQaiahEvJN0Aq...
|
| It's obviously a flawed analysis, because stock prices are
| unpredictable (and, to a lesser extent, future revenues and
| margins). But it should make it clear why growth has such a
| high multiple.
| colechristensen wrote:
| Dividends and increased share value through buybacks are
| taxable as capital gains (usually).
| onlyrealcuzzo wrote:
| Most dividends are ordinary / ordinary income.
|
| > Dividends are the most common type of distribution from a
| corporation. They're paid out of the earnings and profits
| of the corporation. Dividends can be classified either as
| ordinary or qualified. Whereas ordinary dividends are
| taxable as ordinary income, qualified dividends that meet
| certain requirements are taxed at lower capital gain rates.
|
| https://www.irs.gov/taxtopics/tc404#:~:text=They're%20paid%
| 2....
|
| When are dividends qualified (capital gains)?
|
| > For a dividend to be qualified, there are certain
| criteria that must be met, according to the IRS. For
| stocks, the criteria is: The stock must be held for at
| least 61 continuous days, unhedged, out of the 121-day
| period, beginning 60 days before the ex-dividend date.
|
| This covers most passively managed funds (most 401k funds
| these days), but still eliminates nearly all actively
| managed funds (the majority of capital invested).
|
| That's the whole point of share buybacks - it's a way to
| transfer value to shareholders that _definitely_ isn 't
| considered income.
| formerkrogemp wrote:
| > That's the whole point of share buybacks - it's a way
| to transfer value to shareholders that isn't considered
| income.
|
| If the presumption is that share buybacks increase stock
| prices more than simply in the short term, then, sure,
| that'll work out in practice. A pitfall to share buybacks
| is that many executive compensation packages are tied to
| stock price performance which can be juiced by billions
| in share buybacks. What we can observe is that short term
| stock buybacks are pushed in favor of financial
| resilience, maintenance, and necessary investments that
| ultimately leads to the company needing few-strings
| attached government bailouts. One of the most recent
| examples is the airline industry in the US. I do
| appreciate the discussion around qualified and
| unqualified dividends and their relative tax treatments.
| As a short term shareholder, I'd prefer stock buybacks.
| As a long-term shareholder, I'd prefer more investment
| and financial resilience.
| onlyrealcuzzo wrote:
| > A pitfall to share buybacks is that many executive
| compensation packages are tied to stock price performance
| which can be juiced by billions in share buybacks.
|
| You're assuming that shareholders don't want this, too.
|
| There's a reason executive pay is tied to stock price
| performance - that's all investors care about - because
| all they want is capital gains.
| cercatrova wrote:
| Friendly reminder that the US government turned a profit
| from the 2008 bailout. People often hear the word bailout
| and think it was free money when it actually was a loan.
| adolph wrote:
| > That's the whole point of share buybacks - it's a way
| to transfer value to shareholders that definitely isn't
| considered income.
|
| I thought the point of buybacks was "This company doesn't
| have growth ideas--invest elsewhere"
| colinmhayes wrote:
| Right that's why companies return money to shareholders.
| The question is "should we do buybacks or dividends?" and
| companies are now leaning toward buyback because of the
| tax advantage.
| skrtskrt wrote:
| If you have a lot of cash, and ultimately decide you
| can't deploy it all quickly and efficiently, you can
| return it to shareholders and avoid losing 9% a year
| sitting on cash in this inflation environment.
|
| Shareholders will be happy and feel taken care of and are
| more likely to buy your stock next time you have an
| offering when you are ready to spend that money
| adolph wrote:
| > If you have a lot of cash, and ultimately decide you
| can't deploy it all quickly and efficiently
|
| Exactly, when you don't know what to do with cash, send
| it back to the investors in hopes someone else has an
| idea.
| skrtskrt wrote:
| Yeah, just clarifying because what you said was "this
| company doesn't have growth ideas" which is highly
| negative, makes it sound like it's a tired dinosaur like
| AT&T.
|
| It can also just be a prudent decision not to flush money
| down the toilet on expansions or ideas that aren't
| investable yet because of a misplaced need to show that
| that company is not "out of ideas"
| RC_ITR wrote:
| Believe it or not, the S&P 500 returns something like
| 90%+ of net income to shareholders.
|
| That's because net income is _after_ R &D spend etc. is
| accounted for.
|
| The argument for retaining net income is that you have
| future _capital_ expenses that you want to save for (like
| factories or servers), but that's an increasingly less
| pressing need for modern companies.
|
| Given the above, companies can choose to return that net
| income as cash, but then shareholders have to redeploy
| immediately (and potentially in competitors'
| stocks/bonds) _OR_ companies can choose to buy back and
| burn their own shares, allowing shareholders to defer any
| decisions and keeping all capital locked up in the
| company's stock.
| onlyrealcuzzo wrote:
| > but that's an increasingly less pressing need for
| modern companies.
|
| Maybe in the US and EU.
|
| We exported factories and manufacturing to the developing
| world, where CapEx is very important.
|
| Considering that China grew at 2x the rate of the US and
| >3x the rate of the EU - CapEx seems to still be worth
| considering...
| onlyrealcuzzo wrote:
| Not unless you think every company that returns money to
| shareholders is out of ideas - at which point - if you're
| never going to get money back, why invest in the first
| place?
| InitialLastName wrote:
| > if you're never going to get money back, why invest in
| the first place?
|
| That's a question for tomorrow's (hopefully larger) bag-
| holders, not today's.
| Lavery wrote:
| The capital gains / income tax rates have only a minor impact
| on the weight of growth in valuation models. One way to see
| this without getting to technical: there are a number of
| (very large) institutional investors that pay no tax at all
| (university endowments, charities, etc). If what you're
| saying is true, untaxed investors would have radically
| different allocations than similar taxed investors. That's
| not the case.
| onlyrealcuzzo wrote:
| > If what you're saying is true, untaxed investors would
| have radically different allocations than similar taxed
| investors. That's not the case.
|
| Except it is the case for endowments and charities. They
| both have much lower risk tolerance than HNWI (~33% of
| capital).
|
| The bottom ~50% of capital is in R/E and is mostly about
| living, and less about taxes.
| snowwrestler wrote:
| I think it's simply that the Post was saddled with high legacy
| overhead costs and slow digital growth at that time. Whereas
| Axios today is basically the opposite: strong digital growth
| with zero legacy overhead.
| coverband wrote:
| A couple of data points of relevance:
|
| * Axios revenue for 2022 projected to be $100 million, up from
| $85M in 2021
|
| * WP revenue in 2012, last year before its sale was $4.01
| billion, down from $4.13B of prior year. However, this includes
| all WP Co. properties, not just the newspaper.
|
| * Axios staff: ~60. WP staff: ~3,000
| rchaud wrote:
| Those staff numbers look good, until you realize how many
| more people will be required to grow their revenue to where
| WP is.
| texasbigdata wrote:
| The investors (generally, abstracting here) in mature-ish
| assets want a 20%+ gross IRR they can transact on and
| actually exit so they can return $ to their LPs and
| therefore get their fat bonuses. Aspiring to reach some
| arbitrary milestone is likely not on their radar; just
| doubling revenue might get them there.
| swyx wrote:
| sorry but no way was the relevant revenue number $4b when the
| asset sold for $250m. unless it was bleeding money, that
| fails the sniff test.
|
| https://www.vox.com/2016/6/28/12050416/jeff-bezos-saving-
| was...
|
| > . The last time total operating revenue for the paper was
| published, in 2012, it was $580 million; one former executive
| estimates today it's probably closer to $350 million. Another
| Post veteran told me that Bezos said in a meeting that the
| company's annual budget, currently around $500 million, will
| have to be cut by 50 percent over the next three years.
|
| there. better.
|
| ---
|
| edit: jeez, the axios numbers are way off too. they had 60
| people in 2018.
|
| now it stands between 380
| (https://www.comparably.com/companies/axios-
| media/headquarter...) and 520 (https://craft.co/axios)
| symlinkk wrote:
| What are they paying for here? The Axios "brand" is not well
| known enough to justify that much money. The "tech" is your
| standard CMS, anyone can build that. The "talent" is just average
| writers, in fact I can't name a single one. How is this worth
| half a billion?
| stagger87 wrote:
| Ads
| missedthecue wrote:
| 2.4 million subscribers according to a Google search. Anyone
| can build a simple news site and hire journalists. Can anyone
| get that many readers?
| rchaud wrote:
| How many of those are engaged subscribers? If you subscribe
| in January, but haven't opened an email since March, you are
| still counted in subscriber rolls. But you are unlikely to be
| monetizable.
| 55555 wrote:
| Anyone can get that many subscribers by spending a fraction
| of 500mm USD on ads.
| Alupis wrote:
| > 2.4 million subscribers according to a Google search
|
| Which is on par with a moderately successful YouTube channel
| - which likely has far more reach than Axios.
| [deleted]
| jgalt212 wrote:
| Reorg Research has been targeting 3X this amount.
|
| https://newspub.live/news/warburg-backed-news-group-reorg-re...
| samarthr1 wrote:
| For whatever reason, until I started reading the article, the
| first thing that came to my mind was "why did axios (the http
| library) sell?"
| adamrezich wrote:
| when I worked at a web development company a few years back,
| they used axios (http library) and I just assumed it was
| related to Axios (website), like it was made for the website's
| use and open-sourced. I honestly had no idea they were wholly
| unrelated.
| adhesive_wombat wrote:
| I won't lie, I'd sell an HTTP library for half a billion and
| change.
| redanddead wrote:
| but then it wouldn't be a library anymore right?
|
| people buy in and work on open source projects because
| they're open source
|
| I know of a few projects that are closed source but on npm,
| one of which is syncfusion, they make frontend components, I
| only found them when I was searching for a tree map
| component.
|
| But then I found echarts's tree map component by Apache, and
| it was like a completely next level compared to syncfusion,
| was 10x easier to integrate and had 1 million times more
| users it felt like. The github repo was like night and day in
| activity
| redanddead wrote:
| I feel like axios the http lib is worth more.
|
| 525M is way inflated for some publication that may become
| worthless at the whim of viewers and journalists
|
| aren't investors getting ripped off?
| henning wrote:
| The news site, not the JavaScript package.
| didibus wrote:
| Dangit, I really liked Axios, and I worry the quality will go
| down afte this. Wished they'd remain independent.
| TheGoodBarn wrote:
| i386 wrote:
| [deleted]
| NotTameAntelope wrote:
| > Please don't post comments saying that HN is turning into
| Reddit. It's a semi-noob illusion, as old as the hills.[0]
|
| Approximately 2007 (the year HN was created).
|
| [0] https://news.ycombinator.com/newsguidelines.html
| i386 wrote:
| Cool burner
| NotTameAntelope wrote:
| You actually joined HN less than a month before I did,
| FWIW.
|
| You should know better!
| arcticfox wrote:
| > Please don't post comments saying that HN is turning into
| Reddit. It's a semi-noob illusion, as old as the hills.
| i386 wrote:
| It's a little annoying when top comment has nothing to do
| with the post content and is bad meta joke
| esel2k wrote:
| Looking at a previous article on NYT at the comments section
| there are alot of people not really wanting to read axios:
|
| https://www.nytimes.com/2022/03/07/business/media/axios-loca...
|
| Not wanting personalization algorithms or not liking bullet
| points.
|
| Overhere at HN the commenters are very positive.
|
| Anyone has an idea if this based on demographics or interests
| that there is such a discrepancy?
| rchaud wrote:
| Over here at HN, users would burn the NYT in effigy if they
| could, for no other reason because they force you to call them
| to cancel your subscription.
|
| BTW, I have successfully unsubscribed by just paying w/ Paypal
| and disabling the automatic payment from the Paypal UI. No, I
| don't live in CA and do not have any unsub-friendly laws
| applicable to me.
| Someone1234 wrote:
| Congrats on working around their dark-patterns, but that
| doesn't mean their dark-pattern business model isn't
| deserving of critique and warning others to avoid.
| sieabahlpark wrote:
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