Group Nine Media, the owner of websites such as The Dodo and NowThis, is considering using a SPAC to acquire competitors as digital media continues to consolidate, WSJ reports.
Why It Matters: “Digital-media companies have struggled to maintain fast growth in online ad sales, given stiff competition from tech giants including Facebook Inc. and Alphabet Inc.’s Google. The coronavirus pandemic added more pressure on the sector, though some companies have begun to bounce back.” The answer to the sector’s problem in recent memory has been consolidation.
Recent Digital Media Deals:
- Buzzfeed bought Verizon Media’s HuffPost last month.
- Last year, Vice Media Group acquired women-focused outlet Refinery29.
- Vox Media also merged with New York magazine publisher New York Media in 2019.
A Little More On Group Nine: “Group Nine is known for news, travel and animal videos posted on social-media platforms that are shared widely. Its other properties include Thrillist, popular with travel and food enthusiasts, which was founded by Group Nine Chief Executive Ben Lerer.”
- The company was founded in 2016 by merging a bunch of digital media companies (backed by venture capital).
So How Does This Help Them? Acquisitions could expand Group Nine’s audience and “give it more bargaining power with online advertisers.”
The Bottom Line: Even before the SPAC option presented itself, Group Nine has begun buying up competitors. Last year, it bought PopSugar, a women-focused outlet, valued at $600 million in an all-stock deal. It’s still unclear what kind of companies Group Nine will target next.