- Axel Springer to expand further after buying Business Insider
- Sales outside Germany are now almost half of total revenue
Germany’s biggest newspaper publisher is becoming less German.
Axel Springer SE Chief Executive Officer Mathias Doepfner said the company will continue to expand in English-speaking markets this year to drive growth after spending $343 million to buy online news site Business Insider in 2015. Its Upday news app that’s installed on the latest Samsung smartphones in markets including the U.K. and Germany can become a global product, he said.
“With three quarters of profits coming from digital businesses, it’s a good starting point now to really enter the English-speaking markets,” Doepfner said Thursday in an interview on Bloomberg TV after the company reported rising 2015 sales and profit. "The U.S. is a top priority.”
Doepfner is betting on Business Insider and other English-language ventures to prove he can make news pay in the Internet age and win over readers in the U.S. and Britain. Since taking over at Axel Springer in 2002, he’s used a string of acquisitions to turn the publisher of the best-selling Bild tabloid into an operator of online news and classifieds portals that he touts as a model for 21st century media.
Doepfner, who worked his way from the newsroom to the executive suite, said Facebook Inc. is an attractive potential partner for publishers. Axel Springer tested the social network’s Instant Articles product and was pleased by the level of control the publisher got, Doepfner said.
“Facebook allowed us to control the content, control advertising sales with a fair revenue share, to get access to usage data,” Doepfner said. "That sounds like a distribution partner, whereas other players here and there tend to control the whole revenue chain and have more of a kind of disruptive or destructive approach.”
Instant Articles and the Upday app, developed exclusively for Samsung, are part of a wider plan by Doepfner to spend aggressively on digital media to counter a decline in German print-ad sales. Axel Springer last year raised its stake in New York-based social video producer NowThis Media Inc. to 14.6 percent from 4.3 percent, after leading a $16 million funding round. It’s also backing Thrillist Media Group, a U.S. lifestyle portal targeting male readers.
Shares of Axel Springer fell 0.4 percent to 47.41 euros at 3:34 p.m. in Frankfurt. They’ve lost 17 percent in the past year.
Axel Springer’s digital activities account for 62 percent of sales and 70 percent of earnings before interest, taxes, depreciation and amortization, the company said Thursday. The shift from Europe’s biggest newspaper publisher to one that does most of its business online has been accompanied by a push abroad. Axel Springer got 48 percent of sales outside Germany last year, up from 21 percent in 2009.
"Germany remains the home but the world is our market,” the CEO said.