Dow Jones Buying MarketWatch for $519 Million
Yes Virginia, there is money to be made in web publishing, especially stock market and trading news! The news will invigorate bloggers and news publishers everywhere. If you’re read by a certain targeted market with money to spend, you can be worth something. Maybe not as much as MarketWatch, but possibly worth a good bit. In order to gain a competitive edge in the internet content and advertising market, Dow Jones has decided to buyout MarketWatch. The deal would cost Dow Jones $18 for a share with the complete figure hovering around $519 million dollars!
This deal ends a month long bidding war, which saw Viacom, The New York Times Co., and Yahoo Inc. trying to outbid each other. It however would require to be approved from the shareholders and if it happens, Dow Jones could get a major boost in the internet marketing business. Yes, the Internet is BACK! Advertising has become a legitimate form of web publishing revenue and if anything, this MarketWatch should back up that prediction.
Dow Jones feels that the acquisition of MarketWatch is strategically right, financially attractive, and has manageable execution risks. Dow Jones expects the deal to close sometime in 1Q05 and for it to be $0.05 dilutive to 2005 EPS. The company expects to borrow about $375-400m to finance the transaction and will repay this debt from the Dow Jones excess cash flow within the next three years.
MarketWatch was founded in 1997 and runs 2 websites (CBS.MarketWatch.com and BigCharts.com) and some syndicated programs on CBS. CEO of the company Larry Kramer told media: “Joining Dow Jones is a great next step for MarketWatch. Being part of one of the most respected media conglomerates in the world gives us a terrific platform to grow our business and compete with the largest media companies.”