Internet millionaire plans suburban Philly local-news chain
Michael Golden, one of the online-commerce pioneers who got rich when eBay bought King of Prussia-based GSI Commerce for $2.4 billion in 2011, is investing a couple of hundred thousand in the local-news business.
Michael Golden, one of the online-commerce pioneers who got rich when eBay bought King of Prussia-based GSI Commerce for $2.4 billion in 2011, is investing a couple of hundred thousand in the local-news business.
Golden is backing "hyper-local news websites" MoreThanTheCurve.com, for Conshohocken, and AroundAmbler.com - and soon another site in Glenside - as part of a new media company, Burb Media LLC.
Local news is famously a great way to make a small fortune - if you start with a large fortune.
But Golden says it's not expensive: Burb has three employees: techie-designer Marc Garabedian, "who's been with me since GSI"; AroundAmbler chief Ben Bergman; and Kevin Tierney, who focuses on Conshohocken. UPDATE: Tierney is also a partner with Golden in Burb Media.
Most readers use social media to read the items. "They are getting our information through Facebook," he told me. "We get incredible reader engagement and response."
They're giving away the product. How can Burb get paid?
"Advertising is enough for break-even" - especially if you happen to own a lot of potential advertisers, Golden says.
He figures on selling $100,000 in advertising this year, some of it from Golden-backed restaurants and apartment rentals. He expects another $200,000 from "physical events that we own the intellectual property for" - weekly farmers' markets, the June 24 Conshohocken Music Festival ("tickets are $25; we'll sell more than 2,000"), restaurant weeks, beer gardens, pub crawls.
Though Golden is a local apartment landlord and "restaurant angel" - backing the local Bryn & Dane's and Banh Street chains, among others - he notes he also has national investment contacts, and publishing cred:
"In 2007 I took over Complex Magazine in New York. It was very insolvent." He'd been running Homeclick, an early "luxury-home-improvement site," and sold it to a group including upstate Pennsylvania-based retail guru Seymour Holtzman.
Holtzman's properties included Casual Male, the retail chain whose suppliers included T-shirt maker Ecko Unlimited. Its owners had started Complex to reach young-male readers, and wanted to cut their losses on it.
"So when I sold Homeclick, they asked me to turn around this magazine," Golden recounts. "It had tons of potential. We bought into it at [a valuation of] $9 million." He hired a publisher, had a hot website built, and drove tons of Google traffic to twenty-something men.
It worked: A joint venture of Verizon and Hearst bought the group last year for $350 million. Golden is kicking himself that he sold his stake in 2010, when the group brought in Accel Partners and Austin Ventures to pay off its debt, at a more modest $57 million.
Still, he caught the bug: "That was a successful foray" into media, Golden says. This time "I'm not saying we'll be as successful monetarily." But Golden cites a bigger motive: "Strong local news reporting in our community is really important."
On Facebook, Golden noted past online-local media efforts, from CitiSearch to Patch, were losers until social media cut distribution costs and boosted interactivity.
The way things are now, "we don't need to save the newspapers. We don't even need websites." The tools to offer "reliable, authentic, grassroots journalism" and places where "our community can engage with each other" are ready for small groups like his.
(215) 854-5194 @PhillyJoeD
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