Is TheStreet.com In Play?

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Includes: GE, NWS, TST
by: Ashkan Karbasfrooshan

Now that News Corp.’s (NASDAQ:NWS) acquisition of Dow Jones (DJ) is a fait accompli, I wonder what fallouts, if any, we will see amongst competitors.

Thomson (TOC) and Pearson (NYSE:PSO) will be under the spotlight to react, but what about GE (NYSE:GE) whose CNBC franchise will be well within Rupert Murdoch’s cross-hairs as he unleashes Fox Business Channel.

With digital opportunities being so important, I wonder if GE’s NBC unit will try to bolster its own online strength. If it does, how long before it makes a move for TheStreet.com (TSCM)?

TheStreet.com is one of those companies, like CNET (NASDAQ:CNET) and others, that can be a buyer as much as it can be a seller. TheStreet.com’s market cap of $300M is nothing to sneeze at, but with yearly revenues of $56M, no debt and $50M in cash, it’s a solid asset with a very strong brand name that could over time make a difference in the business news segment.

TheStreet.com has historically been too reliant on subscriptions, a revenue stream that in today’s advertising-obsessed environment might hurt its chances to fetch a hefty premium in an M&A. Of course, with Rupert Murdoch’s mammoth ambition and track record to make moves and act on them very fast, it’s true that TheStreet.com might not be enough for CNBC to contain the oncoming train otherwise known as the Fox Business Channel.

Then again, TheStreet.com’s founder Jim Cramer’s show is on CNBC, so that creates an interesting predicament for sure…

And speaking of NBC, CEO Jeff Zucker is quick to state that CNBC need not worry too much (ie. an acquisition is not necessary), but if you are TheStreet.com, then you can rest assured that, maybe, just maybe, Rupert Murdoch might be eyeing your assets as it bolsters Wall Street Journal’s online ambitions.

Seeing how strong the WSJ and TheStreet.com are in subscriptions, I don’t think that deal makes the most sense (because Murdoch should in theory be looking at bolstering advertising sales, not doubling up on subscriptions…) but the fact remains, as two media giants GE/NBC and News Corp. prepare to clash in the lucrative business segment, TheStreet.com is one asset that is definitely in play.

A little tidbit worth noting: TheStreet.com this year hired former iVillage senior executive Steve Elkes. You might recall, iVillage was acquired by NBC for $600M in March 2006. We’re not saying that this means another sale to GE is a slam dunk for Elkes, we just find that interesting. Mr. Elkes had no comment when we asked him for his thoughts on that theory… but I would presume that his first mandate when he came in to TheStreet.com as Chief Revenue Officer and Head of M&A was to scoop up assets for TheStreet.com. So far, he’s pulled the trigger on Stockpickr as well as Promotions.com… we’ll see if his third deal will in fact be the charm.