Comment on There Are No Weird Blogs Anymore Cause It’s More Fruitful to Drive Them Out of Business
chicken@lemmy.dbzer0.com 1 day ago
In many cases, the best decision for the firm is the one that directly undermines the company it controls.
How though? I don’t doubt this is a real thing, but there isn’t really a satisfying explanation being offered here. What the article is saying sounds like the process is, take profitable business, throw in garbage, somehow more profit. Where’s the money coming from?
MacronDeezNuts@beehaw.org 1 day ago
Look up private equity and corporate raids.
Short version - Layoffs increase short term profits, then you let the business die to sell off the assets. This is generally considered a safer strategy than long term investing because it doesn’t require expertise and you get paid quicker (compared to buying a company and waiting 5+ years to turn a profit on the purchase).
chicken@lemmy.dbzer0.com 17 hours ago
I have read some articles about this, and I can see how it makes sense in some contexts. Like iirc when this happened to Red Lobster, they were able to make money through a combination of ripping off a certain group of investors, and the significant value of the company’s real estate holdings. That makes sense.
In the case of online magazine equivalents though I really don’t get it. What is there to sell off? Shouldn’t any potential long term profits be priced in at the point they get bought out? If the company has tangible assets like offices, couldn’t they just sell those without firing anyone and have people work from home? The intangible assets are all directly tied to the publication’s reputation and audience, which seems like it would die off fast without anything worthwhile on the site.
Deyis@beehaw.org 15 hours ago
Oh god no! The tangible assets like buildings and land only increase in value, you don’t get rid of those. You sell it to a holding company and lease it back to the original company for a profit (and probably several other companies who want space, too).
You then strip operations down to the bare minimum. A couple of writers at most and they’re only really there to make sure the automated AI article generator doesn’t accidentally publish a napalm recipe or some shit. You want to run it with as few people as possible to still generate enough content to run ads. Utilise your fanbase to submit content that you can run ads on because they’ll do it for free or a chance to win a t-shirt or some shit. No fans? No problem! Rip everything off relevant subreddits or other sites doing the exact same thing. Make up unsourced slop to piss people off because it generates engagement like you wouldn’t believe. More eyeballs, more ad revenue.
And you make damn sure that the company never makes a profit on paper so you don’t have to pay the relevant taxes. You made $50k more than you expected? Better pay a consultant (you) $40k to find out why. Then increase that rent by $15k.