Two Lessons for Subscription Companies from Re/code Sale

Last week Vox Media acquired Re/code, an 18-month-old tech publication founded by Kara Swisher and Walt Mossberg, former writers for the Wall Street Journal.

Last week Vox Media acquired Re/code, an 18-month-old tech publication founded by Kara Swisher and Walt Mossberg, former writers for the Wall Street Journal. The deal was an all-stock transaction worth between $15 and $20 million, according to Business Insider. While some critics are quick to dub Re/code a failure much like Gigom, Swisher doesn’t see it that way.”I think we did a great job with the journalism and the brand, but you have to realize your capabilities, and what it is you actually want to do,” Swisher told Business Insider.”The media business is changing at a quantum speed, and we needed to be with a company like Vox that has the key capabilities in online advertising and publishing to navigate those changes, while also hewing to the same standards of high-quality journalism that we both value,” said Swisher.In other words, Re/code a small fish in a big sea, but Vox Media is a huge fish – valued at $380 million in December. If Re/code retains its independence and editorial control, it can continue to do its work while letting someone else pay the bills. Not a bad gig if you can get it.Insider Take:What lessons can we learn from this sale and acquisition? Dylan Tweney of Venture Beat says this is a cautionary tale in his May 29 post. Publishing is a tough business and venture capital is not always enough to keep a company afloat. He recommends that publishers diversify their revenue sources. This can include but isn’t limited to advertising, sponsorships, events, investment capital, and subscriptions. Having multiple revenue streams is a solid strategy and helpful to keep a company stable as it develops and grows.Another takeaway from the Re/code sale is that start-ups should move cautiously. As Swisher said, companies need to know their capabilities and their goals. They also need to understand their audience, and the company’s long-term revenue potential. How can they reach their goals and remain viable long-term? Slow, steady organic growth.   

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