Dotdash CEO Neil Vogel. Photo: Brad Barket/Getty Images for Fast Company
Dotdash, the IAC-owned digital publishing company that grew from About.com, has acquired two new digital publishers, TreeHugger and Mother Nature Network, to create a new sustainability vertical within its portfolio, executives tell Axios.
By the numbers: The company expects to do $160 million in revenue and $40 million in EBITDA for 2019.
Why it matters: Dotdash is a rare breed in the digital media industry. It's profitable by a hefty margin and it still makes most of its money from advertising. Unlike other digital media companies looking to diversify revenue away from ads, Dotdash has found that its formula of scaling ad-based websites with evergreen content is working.
Details: Dotdash is acquiring both properties in all-cash deals. While deal terms are not disclosed, Dotdash CEO Neil Vogel says each acquisition is analogous in size to Brides, the wedding-focused outlet that it purchased in May from Condé Nast.
- Vogel says that he's acquiring 10 people, the full editorial teams of both websites.
- Both sites are currently owned by Narrative Content Group. Their sales and operational staffs will remain with the larger holding company.
- The sites were sold to Narrative via a merger in 2012. TreeHugger was previously owned by Discovery Communications.
Between the lines: The investment in sustainability by Dotdash is a departure from its typical content strategy, as it doesn't fit neatly into any one vertical.
- Mother Nature Network is one of the most popular websites for providing resources about the environment and responsible living. TreeHugger is focused more closely on sustainability in design, home and living.
- Both sites align closely with Dotdash's existing sites like The Spruce, a home design website, and ThoughtCo., an educational website.
- "I love this space because I don't think there's a clear-cut leader and I think that people are really underestimating the size and opportunity of this content," says Vogel.
The big picture: Dotdash has built a sizeable digital publishing business by acquiring service content websites with loyal followings and then growing them using its resources and the resources at IAC.
- It grows the audiences at these sites by first optimizing them technically — streamlining the ad experience, revamping the design, making them faster, etc. — and then selling them at scale alongside other Dotdash-owned sites.
- "This is our fourth time doing this. At this point, we've proven that we can grow an audience and then monetize it. We have a swat team in doing these things."
Be smart: Dotdash is a digital media brand that is often overlooked as being profitable in the digital era, in part because its growth strategy isn't tied to acquiring household name news brands, but rather brands with small, niche, loyal followings.
- But its bottom line, at an expected $40 million in profit to close out 2019, is impressive, considering that most digital media companies that focus on news and information are just starting to hit profitability this year.
The bottom line: "We're not rehab people. We have no interest in buying things that are broken or messed up," says Vogel. "We pay a fair price for real assets. These things work, nice businesses. We think the opportunity here is super scalable."