Bloomberg Purchase of BusinessWeek Flies in the Face of Media Trend

Rupert Murdoch achieved his long-coveted prize, by buying Dow Jones & Company, publisher of The Wall Street Journal for $5 billion.

Warren Buffett leveraged everything, split the B shares of Berkshire Hathaway stock and paid $26 billion for Burlington-Northern Santa Fe — a railroad, of all things — to achieve a childhood dream.

Now, we hear that Bloomberg L.P. has paid $5 million in cash and reportedly assumed another $10 million in liabilities for BusinessWeek — at a time when print journalism is confronted with its greatest challenge in history, with news in printed form taking the biggest hit. If daily newspapers are strained to remain relevant at all, news weeklies are not far behind as they seek ways to remain viable, usually under the brand image and market position of analysis or commentary. It's no longer a matter of reporting what happened, but rather a matter of explaining what it all means.
http://www.nytimes.com/2009/11/18/business/media/18mag.html?_r=1&scp=2&sq=Business%20Week&st=cse


Is there something more at work here? The November 18 New York Times reports that Bloomberg has assembled an A-team of former Time Inc. executives like Norman Pearlstine, Jim Kelly, and most recently, Josh Tyrangiel to oversee the transition and head up the revamped, relaunched magazine and website. Reportedly, the new property will be called Bloomberg BusinessWeek, but will continue to serve consumers (and we would guess also be distributed to subscribers of Bloomberg financial terminals). How much of a focus the website will have is still to be determined, as there is an audit of staff presently being conducted. Announcements about who, among the editorial team, will remain are set for December 1, 2009.

As the organizational structure is rethought and the title is integrated into Bloomberg News operationally, the great irony is that none of these investments appear to be betting on Web 2.0. News journalism has almost completely made the transition to the internet, as we watch traditional outlets like the evening news broadcast on network television struggle.

As much as I personally prefer reading a printed journal or publication, I don’t view any consumer print news vehicle as a wise bet for future investment. My daughter and son seem like fairly typical teenagers and they hardly pick up anything besides their iPod and laptops. I can’t recall the last time they asked to visit a newsstand. If they turn to the television or print at all, they certainly are not looking for breaking news, or even for analysis and commentary.

How Mr. Bloomberg can leverage and reinvent a preeminent business magazine in 2010 that was launched in 1929 is beyond me. It may become a smart channel for advancing his own business communications and brand goals, and it wouldn’t be unthinkable to imagine that he intends to use it as a platform for his own future political aspirations. Steve Forbes certainly did it once with Forbes magazine when he ran for President in 1996 and 2000.

Apparently, the plans are to immediately reduce the workforce by about 100 positions, or 25 percent of the magazine's staff. Some of those layoffs have already reportedly started, with more to come this week.

Maybe there's something developing in the market that I'm not seeing, or maybe Mr. Bloomberg will simply apply the same sage insights and special talents to make this new venture as vibrant and successful as he’s made his financial services company. Either way, it's undeniable that these media purchases are going against the grain of conventional Web 2.0 thinking.