If Craiglist wasn’t “profit-agnostic” how much would Google be worth? Think about it: The run up in Google’s revenues, profit, stock and market cap has to do not just with how profitable the business is, but also with the fact that investors view it as the best play on both the Web and the destruction of print media.
So since Craigslist has itself done a lot to suck out the value from newspapers, you have to wonder, would Google be worth as much as it is worth today if investors could buy stock in Craigslist too?
After all, Google is more of a classifieds/listings business than a traditional advertising business. Yes, classifieds is a subset of advertising, I know that, but hopefully you know that I mean: if we were to rank Google relative to other “listings” business and Craigslist was a comparable, would it trade at such lofty multiples?
Anyway, Craig Newmark and Jim Buckmaster have other things to keep them busy these days.
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According to a graph found on page 17 in the latest issue of Fortune (which, incidentally, looks like a very thin version of Business 2.0), even after you remove the GDP of the country of Morocco ($90B), Google’s market cap ($114B) is larger than the combined market caps of
- News Corp. = $19.7B
- The Washington Post = $3.7B
- The New York Times = $695M
Incidentally, the NYT paid $410M for About.com back in 2005. We put that deal in the Top 10 best Internet M&A deals… but right now, I am not sure what can save the NYT.
Generally speaking, I think newspaper stocks have fallen considerably not just because of the threat posed by the Web but also because newspaper companies profited from the inherent inefficiency between gathering news and publishing it. Today, that inefficiency is largely gone, but newspapers remain inefficient machines.
You have to wonder: if print-centric media companies were slow to adapt and have now seen their market caps fall by 66% since 2004 alone, how badly will TV-centric media companies fall over the next few years? In other words, even those media companies who were quick to adapt have been bludgeoned. The Web shrinks traditional media businesses, it’s not a matter of if, but rather, when and how badly.
