Dotdash Acquires Meredith At A $2.7 Billion Valuation

Dotdash Meredith

Sustainable digital media business models exist – just look at Dotdash.

Dotdash acquired Meredith at a $2.7 billion valuation Wednesday to form a new media business to be called Dotdash Meredith.

At first glance, the two entities coming together feels like a marriage of opposites: a century-old magazine media company and a digital native.

But both companies specialize in evergreen content.

Dotdash offers satisfying answers to search queries, such as “how to roll over a 401(k)” via Investopedia or The Balance, or questions about different types of bathroom lighting on The Spruce. It also emphasizes fast page load times and a light ad experience.

Meredith offers inspiration in areas that don’t get stale, with just one news-oriented publication in People. Think of the recipes available on Meredith properties, such as AllRecipes and Food & Wine, or home decoration advice in Real Simple or Better Home & Gardens.

Both companies also have complementary strengths when it comes to revenue, Dotdash CEO Neil Vogel told investors on a conference call Wednesday evening.

Meredith has forged deep relationships with advertisers during its century as a magazine company. On an average visit, Meredith makes twice as much money from advertising as Dotdash, Vogel told investors.

But Dotdash makes double the amount of money on commerce and performance marketing – think affiliate marketing for credit cards, for example – both areas where Meredith will be able to go deeper post-acquisition.

“We have a lot to learn from Meredith and Meredith has a lot to learn from us,” Vogel said.

Together, the two companies make 24% of their digital revenue from programmatic advertising. Another 41% of digital revenue comes from premium digital advertising (e.g., direct-sold deals). The final 35% comes from performance marketing and consumer revenue, according to slides shared with investors.

But when it comes to planning for a future without third-party cookies, Meredith and Dotdash have pursued different strategies.

Meredith’s plan has involved building up its first-party, logged-in data, while Dotdash focuses on triangulating intent, which begs the question: Which strategy will the combined Dotdash Meredith focus on?

Vogel didn’t elaborate on the post-cookie plan, focusing instead on the fact that the brands are complementary and have much to learn from each other.

During the investor call, the companies shared that they had their first conversation about coming together five years ago and have discussed both individual assets and multiple assets at meetings since then.

But when Meredith spun off its local media business for $2.7 billion in May, it was a sign that consolidation was on the way. Companies often shed non-core parts of their business prior to an acquisition.

For its part, Dotdash has been on an acquisition spree. Over the past few years, it’s bought a varied array of properties, from Serious Eats and Liquor.com to Investopedia, Byrdie and MyDomaine.

But none of its previous acquisitions come close to the scale of the Meredith acquisition.

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