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4 Unlikely Digital Heroes

2010 May 26

When we talk about digital media, we often focus on the obvious paragons of the industry.  Google, Apple, Twitter and Facebook are all amazing companies with real achievements. Yet, in truth they make very bad examples, because they are so unique.

There are, however, some other companies that we can learn a lot from.  These are unlikely successes, from companies which look a lot more like the rest of us. Here are four of them:

Time Warner

In the online world, Time Warner is best known for their disastrous AOL deal.  In one of the biggest mistakes in business history, they roughly halved their shareholders equity by merging with a firm with a flawed strategy and highly dubious revenues.  Management was clearly asleep at the wheel.

In their other media properties though, digital performance has been impressive.  CNN is arguably the best news site on the planet (with an audience that rivals AOL’s) and they have found a way to merge brands such as Fortune and Money with CNN to create one of the best sources of business and financial news on the web.

Unfortunately, Time Warner doesn’t break out digital media in their financial results, so there is no way of knowing how profitable their online media businesses are.  However, from the decided lack of whining from them, it’s probably safe to say that their doing pretty well (Rupert Murdoch take note!).

As an aside, their magazine business seems to be thriving again and I can’t resist pointing out that I predicted a magazine comeback back in January (and took a bit of abuse for it).


Who is quickly becoming the standard for digital research in Europe?  Nielsen? Comscore?

Actually it’s a little known Polish company called Gemius.  Since its inception in 1999, it has become the market standard in 18 European markets, often in head-to-head competition with Nielsen.

I had the chance to speak with Filip Pieczynski, a Vice President at the company, and he attributes their success to several factors.

First is their methodological outlook, which unlike Nielsen wasn’t encumbered with a “people meter” perspective.  Rather they were able to come up with a hybrid approach that merged site data with panels.  Although Gemius was the pioneer, Nielsen and Comscore have since adopted similar methods.

Secondly, their emerging market perspective helped them understand that for most markets cost would be a serious issue, so they were sure to adapt their technology to market realities.  Furthermore, their technology is proprietary, so they never have to wait for 3rd party suppliers to adapt to changing needs.

Finally, they understood the importance of having local offices with local personnel.  They are currently utilizing all three approaches as they expand into the Middle East and into online audio and video measurement.


Naspers, a century old South African company, started out as a publisher of newspapers and magazines in 1915 (they still derive about a third of their revenues from print).

They were a fairly early internet investor, launching an ISP in 1997 and acquiring a 46% share Chinese instant messaging company Tencent in 2001.  Lately, they have been gobbling up companies in emerging markets, most notably and auction powerhouse Tradus (whose Allegro site gave E-Bay a thumping when they tried to launch in Poland).

Most importantly,  Nasper’s is very profitable, earning 31% Ebitda margins in their internet businesses (mostly due to China) and 24% across the company .  All of this from a traditional media company headquartered half a world away from Silicon Valley.

Conde Nast

I saved the best for last.   For those who are not familiar with Conde Nast, they are the world’s leading publisherof glossy monthly lifestyle magazines, with powerful brands such as Vogue, GQ and Wired.

They have also historically been a digital disaster, with web sites that were barely functional, much less usable.  At one point, they were so clueless that they sold the digital rights to Wired.  In a nutshell, Conde Nast was a poster child for old media stupidity: glamorous, slow and clueless.

In 2006, they began to turn things around.  They made two small, low profile investmets into webmonkey and reddit, then went on to completely revitalize their print brands online.  Each site manages to combine monthly magazine content with faster paced web-only fare in a usable, attractive environment.

As best as I can tell, they run all of their content sites of a common platform, complete with CMS, design templates and common components, while keeping each site true to its brand.  It’s not a flashy strategy, but a powerful and Conde Nast digital is probably the best media turnaround I’ve ever seen.

What We Can Learn From our Unlikely Digital Heroes

For me, what sticks out is that each company has fairly simple strategies executed competently.  Gemius offers a great service at a low price, Naspers takes what they learned from successful investments and applies it to new markets and Time and Conde Nast bring top content brands to the web.

None of this would look impressive in PowerPoint presentation to the board.  These businesses had to be built up by strong integration and teamwork at the operational level.  It’s worth noting that the one big “stroke of genius” strategic move, Time’s AOL merger, was a disaster for shareholders.

Moreover, these aren’t the only media companies doing great things.  Vaibmu, a Finland based media consultancy has compiled a list of 10 media innovators in the US and Europe, most of which have their roots in traditional media.

So while it’s easy for bloggers like me to point out the seemingly endless foibles of traditional media companies in the digital realm, it’s also worth noting that there are a lot of smart, creative people out there who are competing and winning.

– Greg

Update: The Economist recently published a profile of Naspers and two of it’s holdings.

13 Responses leave one →
  1. May 26, 2010

    Hi Greg,

    Good overview of these four interesting companies. I enjoyed it. Thanks.


  2. May 27, 2010

    Thanks for this one Greg – it’s important for us to remember that the media companies aren’t just screwing up these days…

  3. May 27, 2010

    Glad you liked it. How are things going with your KATE online expenditure monitoring project?

    – Greg

  4. May 27, 2010

    Greg, Naspers is indeed a great example. Naspers is building its portfolio mainly through smart M&A deals. I recently saw that they also cooperate with DST:

    I would like to add DST to your list of digital heroes although they are financial investors as they create a new class of digital media investors that is unique so far.
    .-= Ralf Schremper´s last blog ..Some thoughts on the Facebook privacy discussion =-.

  5. May 27, 2010

    Thanks for your interest, Greg. At Semanit we believe in delighting clients and our online competitor monitoring service KATE is constantly evolving. Everything is on the move. It is very exciting time and great fun for all of us!

  6. May 27, 2010

    Thanks for the tip, Ralf.

    – Greg

  7. May 27, 2010

    Thanks, Tim.

    Keep up the great work with your Innovation blog!.

    – Greg

  8. May 28, 2010

    Hi Greg,

    interesting article and thanks for mentioning the Innovation Award which we designed for the ICMA. I also wanted to note a company that has been doing online aggressively. It’s Schibsted Classified Media. You can read more about them in their corporate website, but some examples: they closed their classified print operations in Spain & France in 2009 and have achieved operating margins in classifieds in Spain in Q1 2010 of 31% and in France of 41%. Considering the state of the Spanish economy and their core business areas (real estate, cars, jobs, merchandise classifieds), I think it’s quite a good job.
    .-= Clara´s last blog ..The Quiet Media Leaders =-.

  9. May 28, 2010

    Thanks for the tip, Clara.

    Have a nice weekend.

    – Greg

  10. June 17, 2010


    interesting read.

    One comment to Naspers: indeed an interesting story and – looking at their margin – it looks even like a profitable one.

    However, have you checked the prices they paid for their “smart M&A deals”? Being active in some CEE markets myself I know that they paid (sometimes very) high valuations. So even with a double-digit margin (hopefully it is true also for CEE and not only China!) it is still likely that the whole invest paying back the purchase price…

    Just a thought from investment point of view… 😉


  11. June 17, 2010

    Successes really do get short shrift, probably because the failures are so public and colossal.

    Glad that Conde Naste is getting it together. I like their print mags, would be a real shame if they folded.

  12. June 17, 2010


    It’s a very valid point (and one I have raised in the past). However, I know the auction company they acquired quite well and the guys there seem to think Naspers really adds value.

    Anyway, time will tell…

    – Greg

  13. June 17, 2010


    Yeah, they really do seem to have turned it around.

    Thanks for your comment.

    – Greg

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