Via PaidContent comes word that Reed Elsevier is seeking a buyer for Reed Business Information (parent of Publishers Weekly and Variety among others).
Two interesting items pulled from the 2007 earnings results:
- Online revenues now contribute 30 percent of RBI’s revenues.
- Advertising revenues grew rapidly across community sites, up 31 percent.
The commentary from the section "Strengthening the Portfolio" reinforces some of the challenges we’ve noted earlier in building a substantial online ad-revenue business:
Although RBI has had considerable success in developing high-growth online services, its advertising revenue model and its inherent cyclicality fit less well with the subscription based information and workflow solutions focus of Reed Elsevier’s strategy. … Advertising accounts for approximately 60% of revenues.
Book publishers looking to advertising supported models during a digital transition would be well served to both consider the cyclicality inherent in advertising, as well as whether there are alternatives to advertising that might make as much (or more) sense for online publishing.