Business Insider has grown into a digital monster in 12 years. Now CEO Henry Blodget has charted a new wave of expansion – Poynter
Blodget accepts the common idea that the internet has disrupted everything in media – the next turning point is for digital-only sites, broadcast and cable as well. But time and the investment cycle are on the side of well-positioned startups, he believes.
“Fifteen years ago, investors were skeptical about digital content,” Blodget told me in a phone interview. “Then they got excited and (the media industries) got grossly overcapitalized. An upheaval is underway, but the underlying demand remains strong, he said, joking “until Silicon Valley finds a way to absorb it directly into our brains.”
The New York Times is on track towards a sustainable model, he said, and he believes the Insider Group is getting there as well. “Local journalism is going to be the last piece of the puzzle, but we’re starting to see the seeds (of success). It is a market that we hope to enter in a few years.
German publishing giant Axel Springer acquired the company, after a smaller initial stake, for $ 343 million (nearly $ 450 million including debt) in September 2015 and retained Blodget as CEO. In a fairly standard arrangement for founders who sell and stay, he earns capital bonuses as the business within a company grows.
Insider Inc., the new generic name for the companies, has just hit a revenue diversification goal, Blodget said, with about a third of ads, a third of subscriptions and a third of other activities, including commerce and licenses. “We’re not necessarily trying to be the most dynamic or the biggest” (although the story seems to read that way), he told me. “We aim to be sustainable and invest in it all the time.”
Business Insider, initially focused on monitoring the US tech industry and later on a wider range of topics, is still the dominant brand. However, the latest add-ons go a long way.
International expansions had already started, Blodget said. Axel Springer’s dozens of foreign outposts opened the door to many other possibilities.
Axel Springer purchased eMarketer, a well-respected digital research pioneer, in June 2016. It is expected to complete the integration this year with Business Insider’s own intelligence unit. There is a direct selling business and a subscription service.
As Business Insider continued to grow, Blodget wanted to get a foothold in the mainstream news, also paving the way for launching verticals on topics like wine and toys.
How do you do that? In December 2017, Business Insider began rebranding itself Insider Inc., a new parent company as well as a stand-alone site. The two platforms cross-promote, but Insider, 2, remains a lesser-known newcomer.
Like BuzzFeed or Vice, Insider is millennial-focused, part serious, part fun – with a mission, Blodget said, “to inform and inspire the digital generation.”
The Insider Company landing page features a photo of a woman biting into a giant pretzel. No cut line, no tie. (One of my editors, digital tools expert Ren LaForme, quickly found it at Mader’s, a venerable German restaurant in Milwaukee). The image indicates that you don’t have to be a businessman to take a closer look.
As for more ambitious journalism, Insider has published an abridged textual and graphic version of the Mueller Report (by “Blackhawk Down” author Mark Bowden). And Business Insider has covered the rise and fall of WeWork extensively.
Blodget began his career as a journalist right after college, as a freelance writer for Slate and other national publications. But that’s not how he made his name. He moved on to stock picking and analysis of emerging tech companies in the 1990s, joining Merrill Lynch to become arguably the industry’s most prominent and influential commentator.
When Amazon had just taken off in 1998, he predicted that its shares would drop from $ 242 to $ 400 within the following year. Critics scoffed, but Amazon hit the target in three weeks. To this day, Blodget remains a huge fan of all things Amazon, especially its growth formula of “obsessively focusing on and keeping customers happy”. Vice versa. Jeff Bezos led an investor fundraiser and held a 3% stake at the time of the sale of Axel Springer.
Shortly after the turn of the century, Blodget’s career collapsed with the dot-com bubble. He was charged in 2003 by the Securities and Exchange Commission with civil securities fraud for sending internal emails that differed from some of his published reports.
He settled for a $ 2 million fine, forfeiting $ 2 million more of what he had earned and agreeing to a permanent ban from working in the securities industry.
I casually touched on this chapter during the interview, anticipating that it might be a painful subject. But not at all. Blodget has so successfully converted to journalism and publishing, what’s wrong with still feeling? He even offered a few light anecdotes, though he said he still believed investigators and prosecutors were looking for a technical breach to land a top scapegoat.
Returning to Slate as a contributor, Blodget said, he ended up covering Martha Stewart’s insider trading trial in 2004.
One of his attorneys was New York Attorney General Eliot Spitzer, who, Blodget observes with a chuckle, “got into trouble himself” (a prostitution scandal that forced him to step down as governor in 2008). Spitzer later became a contributor to Slate, making them, so to speak, colleagues.
Business Insider started out as “Silicon Alley Insider” – Silicon Alley was a nickname at the time for the New York slice of the high-tech industry. He remains based in New York but has expanded his geographic reach as well as what he was trying to cover.
I’m not convinced that Insider’s next growth spurt will prove to be feasible. There are certainly a lot of incumbents in the general information space targeting young people. But business news with a tech slant wasn’t exactly unexplored when the site launched in 2007. And I’m not sure I would bet against Blodget.
Rick Edmonds is Poynter’s media business analyst. He can be contacted at [email protected]