It may have been a small deal in monetary terms, but the ripples from Re/code’s acquisition by Vox Media earlier this week continue to spread. One recurring theme is shock and/or bemusement that Re/code couldn’t survive on its own: After all, when it comes to individual media brands, Kara Swisher and Walt Mossberg are close to the top of the heap. If they couldn’t make it on their own, what hope is there for others?
Sources close to the Re/code deal said the site still had plenty of cash left from the financing round it did with Comcast Ventures and others. So why not continue to run the site as a standalone entity? Because the writing was clearly on the wall: Re/code was likely never going to get to a size where its business model would make sense, or at least not without more money. And Vox was a lot closer to that goal.
One takeaway, as I tried to point out, is that there’s a “barbell effect” taking place in the media business, where you either have to be tiny and focused on a topic or audience niche—the way sites like The Information and Search Engine Land and Techdirt are—or you have to be giant and mass and have huge reach. Tech analyst Ben Thompson (who is himself a good example of a profitable niche media business) has written about a similar concept known as the “smiling curve” for publishing:
Note: This was originally published at Fortune, where I was a senior writer from 2015 to 2017
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