The siren call of digital media startups is hard to resist, even in a market as rocky as this one.
That was illustrated sharply on Monday by the premium price that Cox Enterprises, owner of the Atlanta Journal-Constitution, agreed to pay to buy the prominent startup Axios. The $525 million headline valuation that Cox is putting on the five-year-old Washington-based news startup represents roughly five times the revenue that Axios was targeting this year. That multiple is significantly higher than what publicly traded publishers are trading at.
For instance, shares of News Corp., which owns the Wall Street Journal, are trading at 1.3 times this year’s expected revenue, according to Bloomberg data. The New York Times Co. is at a little above two. Specialist publishers such as Ziff Davis and Future Plc are each trading closer to three. BuzzFeed, the laggard of the group, is at a little below one. On average, this group is at about two.
