Oligopoly brief: Hearst Corporation
The Hearst Company is a survivor from the nineteenth century of yellow journalism. It is family-owned, but run by a trust. The company is struggling to adjust in a time when print media like newspapers and magazine are mature industries and look like eventual losers. Hearst has extensive holdings in television and has been in recent years, extending its online presence, just like News Corp. and others.
A recent BusinessWeek article ("A Whole New View at Hearst", 5/5/06) connects the building of Hearst's handsome modernist new Manhattan office building (cost; $700 million) with the company's reviving fortunes as it tries to establish itself in new markets, "pushing beyond its traditional newspaper, magazine, and TV operations."
The company owns 12 daily newspapers including the San Francisco Chronicle, the Seattle Post-Intelligencer; the Houston Chronicle) and a bunch more (mostly in Texas). It also owns King Features, which syndicates comic strips, editorial cartoons, newspaper columns to over 5,000 newspapers worldwide.
But it is magazines where it stands out, as the publisher of Cosmopolitan, Esquire, Redbook, O, Good Housekeeping, Popular Mechanics, Seventeen, Redbook, and others. The company has over 100 international editions, including over 50 international editions of Cosmopolitan. It also publishes a number of industry-specific magazines and guides, with such titles as the Black Book Guides (autos), Electronic Products Magazine, Motor Magazine, and Floor Covering Weekly, along with industry-specific databases.
In television, it owns, through its 68% stake in Hearst Argyle television, many in major market like Boston, Orlando, Baltimore, and Kansas City. It has minority interests in a number of cable TV Channels, including A&E, ESPN, Lifetime, and the History Channel.
On the Web, Hearst Company has been active. It recently sold its 25% stake in women's Web site iVillage to NBC Universal, at a nice profit ($155 million on an initial investment of a few million in 12 years ago). It has investments in such Web sites as drugstore.com, geneology.com, hire.com, Daily Ink, and a number of others.
As part of its thrust into the industries that go beyond traditional media, it has invested in a variety of ventures:
- Brightcove, which helps other companies package content for broadband distribution
- Fitch Group, a credit-rating service (20%)
- Current Communications, a company that has developed systems for delivering broadband over the electrical grid
- Sling Media, software that allow you to view your home TV or computer from a remote computer
- E.Ink, which is developing technology for portable e-books.
- Reed Brennan, which makes customized layout and pagination software for newspapers.
- Mobility Technologies, which make traffic monitoring systems for highway departments.
- TVWorks, which makes software for interactive TV.
The empire seems to be going in many directions, and it's hard to see how a company can manage presence in so many fields, in none of which it is dominant (though it is in the top three in US magazines). It is a private company, so exact results are not available. The company itself (in the BusinessWeek article) has a gross income of around $7 billion, double form the year before.
The technology investments hold promise, but managing to bring a real winner out of them is not going to be an easy task. The best may be to grow them and sell them off to companies that have more muscle in their respective segments. International expansion of the magazine business looks like the best bet, and the worldwide trump of Cosmo certain gives the company a foot in the door.
Most companies in mature industries face this dilemma: will adventures in new, small-cap enterprises save them with new revenue sources as old ones dry up? Or will they sink them as the task of managing so many diverse interests in the company becomes impossible?
9:32:25 PM 
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