Guardian to offload loss-making US digital business
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Wednesday 23 November 2011
The owner of The Guardian newspaper is set to sell a digital publishing business it bought just three years ago, as part of a wider drive drive to overhaul the company and stem losses.
Guardian Media Group (GMG) has revealed it was in talks with a number of buyers to offload its ContentNext arm, which oversees PaidContent and other digital operations. It is understood that the business is being marketed for $15m to $20m (£9-£13m). Sources close to the group said they "did not recognise" that sum.
A spokeswoman for Guardian News & Media, the division of GMG that oversees the newspapers, said: "It's early days but we have received several expressions of interest and are talking to a select number of potential buyers."
She said the decision came after a strategic review of ContentNext before adding: "ContentNext is a high-quality asset but our focus in the US is on building The Guardian."
It emerged in June that Guardian News & Media made an operating losses of £38.3m, widening from £37.8m a year earlier. The group announced a "digital first" strategy and drew up a plan to save £25m by 2016.
Andrew Miller, the chief executive of GMG, said the group could run out of cash in as little as three years if there was not an overhaul at the group. It emerged earlier this month that the group was considering closing its £80m printing plant.
GMG unveiled a site targeting a US audience in September, headed by The Guardian US editor-in-chief Janine Gibson. Ms Gibson, who was the head of Guardian.co.uk, said it marked "the beginning of our new digital operation based in New York".
The group bought ContentNext in 2008 for an undisclosed fee. It said the acquisition of the group set up by journalist Rafat Ali in 2002, was to target "significant expansion" in the US. Mr Ali left the group last year.
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