Bailout

Why is Nick Denton suddenly so bullish?

By Felix Salmon

At the very end of his profile of Henry Blodget, Andrew Goldman drops in a jaw-dropping quote from Gawker founder Nick Denton:

Denton lays out the most optimistic scenario: “This is like the early days of cable,” he says. “High?surprisingly high?startup costs. But eventually advertisers move across and the margins are lavish for the leading players in each category. Jezebel becomes Lifetime, HuffPo becomes MSNBC and Henry becomes CNBC.”

This is by far the most bullish thing I’ve ever heard come from Denton and it makes me wonder whether, finally, he’s beginning to seriously consider — for the first time — selling a large chunk of Gawker Media.

Denton hasn’t launched a new website in a while; in fact, he’s been consolidating his properties, folding the likes of Valleywag and Defamer into Gawker and selling off blogs like Wonkette and Consumerist which he felt he couldn’t make work. Instead, he’s been quietly seeing his empire grow truly enormous: according to Quantcast, he reaches 30 million unique visitors globally every month and 17.3 million in the U.S. That’s 450 million pageviews per month — pretty impressive, although the rate of growth is clearly slowing.

Maybe now is the point at which Denton needs to find an outside investor to shoulder the “surprisingly high” costs of taking a strong online franchise and turning it into the multi-billion-dollar media property of the future. Denton is a serial entrepreneur, having become wealthy by founding and selling First Tuesday and Moreover. He doesn’t need the money from selling Gawker, but at the same time I can’t imagine him just sitting there running it as a going concern, cashing his dividend checks and patting himself on the back for creating a successful company. He needs a challenge, and competing head-on for advertisers with the giants of cable TV is certainly that.

As for Nick being nice about Blodget, that’s classic Denton. Gawker doesn’t do slideshows and listicles and in fact does very little of the aggregation that’s the bread and butter of Blodget’s business. And Denton knows full well that in an apples-to-apples comparison, Blodget is going to make Gawker look almost old-fashioned in its rectitude. If Denton can help give Blodget a certain amount of credibility, that just makes Gawker Media look positively Olympian. Which is maybe exactly what he wants, if he’s finally willing to accept outside investment — at a suitably stratospheric valuation, of course.

Full post as published by Macroprudential on July 09, 2010 (boomark / email).