Get SF Weekly Newsletters

Tuesday, January 31, 2012

Sorry, Twitter, if You're in the Media Business, You're a Media Company

Posted By on Tue, Jan 31, 2012 at 10:30 AM

Given how Silicon Valley moguls flee from the term "media company," you'd almost think it was as bad as "child-porn merchant." But whether they like it or not, companies like Google, Facebook, and Twitter are media companies. They don't have precisely the same business models as News Corp., Disney, or Viacom, but that doesn't matter a bit.

Sorry, folks, but if you present information to the public and sell ads against it, you're a media company.

Google has long eschewed the term. It makes sense if you consider the stock-market valuations of tech companies vs. media companies. Wall Street loves tech. With media, investors tend to be fair-weather fans at best.

And that's no wonder. In 2011, Microsoft's net-profit margin was 22.10 percent. Apple's was 23.95 percent. Intel's was 33.97 percent. Meanwhile, Viacom's margin was 14.64 percent, Disney's was 12.86 percent, and News Corp.'s was 9.42 percent.

Google's was up there with its would-be tech brethren: 25.69 percent. But that doesn't mean it's a tech company. It means, among other things, that it has a more manageable cost structure. Its business -- mainly, the selling of online ads -- is different from that of a traditional media company.

But it's still a media company.

Now Twitter, perhaps laying the groundwork for a future IPO (Facebook is going public any minute now), is playing the same game.

"Twitter is not a media company," CEO Dick Costolo declared from the stage at AllThingsD's media conference in Laguna Nigel on Monday.

When interviewer Peter Kafka pointed out that Twitter depends on advertising for revenue, Costolo took his argument to new heights of disingenuousness. "We're in the media business, but we're not necessarily a media company," he said. Lewis Carroll couldn't write such dialogue.

Costolo took a tack similar to Google's: "We don't create our own content; we're a distributor of content and traffic. We're one of the largest drivers of traffic to other media properties, [namely] to other online Web properties, even to films."

Presumably, then, cable companies, local television stations, and distribution outfits like Buena Vista Television aren't media companies, either. They might be surprised to hear it.

Dan Mitchell has written for Fortune, the New York Times, Slate, Wired, National Public Radio, the Chicago Tribune, and many others.

Follow us on Twitter at @TheSnitchSF and @SFWeekly
  • Pin It

Tags: , , , , , , ,

About The Author

Dan Mitchell


Subscribe to this thread:

Add a comment

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed

Like us on Facebook


  • clipping at Brava Theater Sept. 11
    Sub Pop recording artists 'clipping.' brought their brand of noise-driven experimental hip hop to the closing night of 2016's San Francisco Electronic Music Fest this past Sunday. The packed Brava Theater hosted an initially seated crowd that ended the night jumping and dancing against the front of the stage. The trio performed a set focused on their recently released Sci-Fi Horror concept album, 'Splendor & Misery', then delved into their dancier and more aggressive back catalogue, and recent single 'Wriggle'. Opening performances included local experimental electronic duo 'Tujurikkuja' and computer music artist 'Madalyn Merkey.'"