E-mail Newsletters: Still Unsexy, Still Selling

This story was written by Rafat Ali.
We have always realized the utility and value of e-mail newsletters, and discussed them here before. After all, they form a big part of our senior industry audience for more than six years now (yep, we're that old). In the current depressed economy, and despite the world being all atwitter over Twitter and Facebook, it is worth reminding that the Web 0.1 remnant is still reaping in rewards for investors, or at least bringing in revenues for some publishers. BW examines some of them, and finds out, not surprisingly, that the world outside Silicon Valley, especially East Coast, has a disportionate share of successes in the sector. Among them, DailyCandy sold to Comcast (NSDQ: CMCSA) for $125 million last year, not exactly a bad return for investors including Bob Pittman's Pilot Group. Then, the male-focused Thrillist, also backed by Pittman, says it is profitable with high single digit millions in revenues, and is launching in its 10th city this month. Also, another Pittman-portfolio company IdealBite, also tips and newsletter focused, sold to Disney (NYSE: DIS) last year for about $20 million

Arguably, the returns aren't YouTube-huge for investors in the sector (nevermind the actual revenues), but at least are supposed to be reliably consistent in the returns. Also, from the publisher and advertiser perspective, it is about being in a user's inbox day in and day out, and at least a better chance of being opened/glanced-over/read, if only out of sheer habit. Then if the list is clean enough, the marketers have better measures of accountability because of reliable analytics such as open rates, and of course better registration data on users.

The story contends that some Valley companies are now following in the footsteps: examples include dog-owner focused social net Dogster and the user-gen reviews site Yelp. Dogster claims it is getting newsletter CPMs as high as $20-$40.

By Rafat Ali