Going from a twinkle in someone’s eye to a company potentially worth $300-350 million is a tall order for any media business. But to have grown to that position in little over a decade is particularly notable – and suggests the company has struck upon something fairly fundamental about human nature along the way.
Mashable appears to have done just that. Ken Doctor reported back in December that the tech-focused general news site was shopping around for a buyer, though it also noted that insiders claim a $250 million sale is looking more likely.
The Wrap points out that that’s a fair step up from the valuation of Mashable even at the start of last year, saying:
“In January, Mashable was valued at $180 million, and Politico says insiders familiar with the potential sale caution it could sell for closer to $250 million.”
So why is a generalist news site like Mashable commanding such a huge number? Even with the enormous valuations for digital properties last year, it seems to defy the accepted wisdom that only niches and the true giants can succeed in the new digital environment.
And yet, as founder Pete Cashmore told an audience at Digital Media Strategies, Mashable has been consistently profitable (or thereabouts):
— Rory Brown (@RoryBrown) September 9, 2015
So what about Mashable’s proposition makes analysts believe it can fetch a few hundred million dollars?
The key point to remember is that Mashable was among the first media companies to truly embrace distributed content and the attendant benefits of sponsored content.
The main Mashable Twitter account has just shy of 6.5 million followers, while its Facebook account has 3,334,000 at the time of writing. It also has region and vertical-specific accounts in the geographies in which it’s launched, although these typically have far less followers than the main account.
To put that in perspective, the main BuzzFeed Twitter account has 2.5 million followers, while its Facebook account has just shy of 6 million at time of writing. It’s clear that Mashable is putting social media at the heart of its strategy.
It’s why Seth Rogin, Mashable’s CRO, states:
“The intersection between mobile and social is key.
“That instantaneous use case demands that we know things before the rest of the world. I’m training you to know, as my reader, that we are the provider of the the most innovative content. We’re using technology and data to empower that.”
And it’s the following quote from Seth Rogin (quite apart from his early comments about revolutionising a business model that chimes with our bunker-busting piece from Monday) that indicates why Mashable might be seen as such a good investment:
“If a brand is speaking to you on Mashable, we call it a brandspeak. We want to be clear.
“Why? Because the only asset we have that matters in the end is the trust of our readers… I don’t think that a reader knows what the word ‘native’ means, and if they do I don’t think they care.”
Mashable’s huge social reach, combined with its focus on providing a safe environment for brands to speak directly to those huge audiences, is something many publishers are striving for – and Mashable happens to be quietly ahead of the curve in that respect.
Despite that, there are indications that Mashable is likely to have missed its revenue targets for the past year – and more worryingly that its user growth is actually slowing.
So Mashable’s strong valuation is largely because it got in on the ground floor of the new revenue opportunities that distributed content allowed – the issue now is whether there’s a hard limit to the amount of money that can be made that way.