Come on Henry, you can smile now.

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Business Insider Is Worth...What?!

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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In the most envy-inducing media news of the week, German publishing giant Axel Springer has agreed to shell out $343 million for 88 percent ownership of Henry Blodget's eight-year-old digital news operation, Business Insider Inc. It already owned 9 percent, and in a press release said that counting cash and debt the deal puts an overall value of $442 million on the company.

As a lot of people have been pointing out ever since talk of a sale began surfacing about a week ago, that's a whole lot more than the $250 million that Jeff Bezos -- who happens to own 3 percent of Business Insider, which he will hold onto -- paid for the Washington Post two years ago. The Post is of course a much bigger and more venerable operation than Business Insider, but it also faces higher fixed costs and, at least before Bezos bought it, declining circulation and advertising revenue. The better-positioned Financial Times sold for $1.3 billion this year; Business Insider's fellow digital-media upstart, Buzzfeed, was valued at $1.5 billion when Comcast agreed to invest $200 million in it this summer.

Here's how Business Insider's valuation stacks up against some major U.S.-based, publicly traded publishing companies -- that is, companies that get the majority of their earnings from what I guess you could call writing-based media (as opposed to, say, TV).

So it's worth a ton more than the big but rapidly declining regional newspaper publishers Tribune and McClatchy, but a lot less than established publishers with national and global footprints. It's also worth a lot less than Axel Springer, the dominant German publisher with a market value of $5.7 billion.

None of this tells us whether Springer is overpaying, of course. The company's chief executive officer, Mathias Doepfner, has clearly been itching to get into English-language media in a big way. Springer is already a partner in Politico Europe; it failed in a bid to buy the FT. Now the company's main vehicle for conquering the English-speaking world is the quirky, tabloidy, often very clever creation of a former star Wall Street analyst laid low by the prosecutorial zeal of former New York Attorney General Eliot Spitzer. Don't we live in interesting times?

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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