SAN FRANCISCO - Bloomberg is buying BusinessWeek magazine in a deal that brings together a financial news service specialising in rapid-fire updates with a print publication struggling to adapt to the internet's information whirlwind.
Terms of the sale announced yesterday were not disclosed. Citing unnamed people privy to the negotiations,
BusinessWeek pegged the acquisition price at US$2 million ($2.6 million) to US$5 million in cash.
Bloomberg would also be responsible for paying other costs, such as severance pay to any of the roughly 400 BusinessWeek employees who might be laid off, the magazine's website reported.
Bloomberg, a privately held company started by New York Mayor Michael Bloomberg, expects to take control of BusinessWeek by the end of the year. That ends BusinessWeek's 80-year run as part of McGraw-Hill, which also owns the Standard & Poor's credit rating agency.
New York-based McGraw-Hill put BusinessWeek on the auction block in July, apparently fed up with the losses that have been mounting at the magazine as its advertising revenue plunged.
The acquisition represents one of Bloomberg's boldest and possibly riskiest attempts to extend its audience beyond its main mode of communication - the roughly 300,000 electronic terminals that it has set up in the offices of money managers, traders, bankers and other financial services professionals around the world.
"BusinessWeek helps better serve our customers by reaching into the corporate suite and corridors of power in government, where news that affects markets and business is made by CEOs, CFOs, deal lawyers, bankers and government officials who typically are not terminal customers," said Daniel Doctoroff, Bloomberg's president.
Like many print publications, BusinessWeek has been reeling from a one-two punch: the longest US recession since World War II and a massive shift in media consumption that has driven more advertising online, where the prices are generally much lower than in print.
BusinessWeek also has been trying to figure out how a weekly magazine can remain relevant at a time when financial and corporate news is plastered all over the web around the clock.
- BLOOMBERG
