Ziff Davis has purchased Mashable. Some are even suggesting that this is was a “fire sale” price. Ziff Davis, a digital media subsidiary of the tech company, j2 is buying Mashable for less than $50 million. What’s interesting about this purchase, is that the new owners want to refocus the company on tech and tech-lifestyle content. The bad news? This means they will have to lay off about 50 employees from Mashable. There’s good news though – employees will have the opportunity to work at other Ziff Davis publications.
Why was the price so low? Mashable was valued at over $250 million less than two years ago. Now, it’s worth a lot less. Mashable has been in trouble for several months after failing to live up to huge growth rates that it had promised to investors. Ziff Davis COO Steve Horowitz had this to say about the Mashable sale:
“We think Mashable punched above its weight in developing an audience, now they have to figure out how to monetize. It’s a really great time for Mashable to get back to the core of what it was — a tech and social site.”
Google and Facebook have taken over the online advertising market, which is part of the reason for this decline. What does all this mean in terms of the layoffs? So far, they have already cut about 30% of their workforce, which is around 170 people. But Pete Cashmore will be staying with the company, started the company back in 2005 as a blog when he was just 19. Cashmore announced the layoffs in a memo to staff, and said the following:
“It is never easy to see colleagues and friends depart the company. While such decisions are difficult and painful, I can assure you they were made only after very careful consideration and based on what we firmly believe will provide Mashable with a strategy and structure that will drive a successful, sustainable and profitable future.”
It is kind of sad if you think about it. People are losing their jobs, but that doesn’t mean its the end. Mashable employees took to Twitter. Instead of getting upset, they actually had some really nice things to say. @TinaAmini tweeted the following “Mashable brought me to LA and to some of the most talented, creative, and funny humans I’ve met. Not only trusted colleagues but now some of my closest friends. I’ll always be grateful for that.” It’s nice to see people exiting on a positive note. Especially when it wasn’t their idea to go in the first place.
This is all rather timely though. In 2016, Mashable posted a net loss of $10 million as revenue rose 36% to $42 million, according to the Wall Street Journal. The company had originally projected $50 million in revenue for 2017 and appeared to be on track for a sizable loss. For the third quarter of 2017, Ziff Davis, however, generated revenue of $127.8 million and adjusted operating profit of $34.7 million. Which means, this is good news for Mashable in a way. While this might not have been the direction that Cashmore wanted to go, at least the publication isn’t going away.