Specialist magazine publisher Future has offered £594m in a combination of cash and shares to purchase price comparison website GoCompare.Future's rationale for the merger is to “address the growing consumer demand for informed and value-driven purchasing decisions” by embracing product-driven editorial.
Specialist magazine publisher Future has offered £594m in a combination of cash and shares to purchase price comparison website GoCompare.
Future's rationale for the merger is to “address the growing consumer demand for informed and value-driven purchasing decisions” by embracing product-driven editorial.
Why is Future interested in GoCompare?
At first glance, GoCompare might seem a strange mate for Future's established magazine business but the publisher has big plans to incorporate price comparison technology into its online brands.
As a source of both independent product reviews and best buy tables publications such as Real Homes, Home & Garden and lifestyle brand T3 would serve as a one-stop-shop in the purchase cycle for home and motor insurance as well as mortgages.
Outlining the intent behind the move to the Evening Standard chief executive Zillah Byng-Thorne envisaged that: "We’ll be like the shop where the assistant can offer you advice on the best product, then show you where to buy it."
GoCompare would provide a readymade opportunity for Future to corner the price comparison market for itself and has already taken steps of its own to migrate toward subscription-based services and the regular income they provide.
GoCo chairman Peter Wood is also the founder of Esure, from which the 14-year old company demerged four years ago and is excited by the possibilities of a tie-up, praising Future's 'market-leading global platform for specialist media and content' as a catalyst for future advertising revenue.
As well as opening up new revenue streams the consolidation would save a fortune on marketing, with rival price comparison platforms forced to spend big to rise through Google's search rankings while Future offers an oven-ready monthly audience of 400m.
Effusing over the potential synergies Byng-Thorne added: "At Future, we’ve long understood that Google wants good content and user experience so when we write content it normally ends up ranking highly in search. With GoCo we can draw that attention to GoCo’s offer options."
Why it matters
Any pairing would create a more attractive platform for advertisers and grow revenue opportunities for both arms of the business.
By joining forces Future and GoCompare would establish a leading global specialist media platform capable of driving consumer choices.
Economies of scale are also expected to generate cost savings of around £10m per year.
Mindful of any conflicts of interests Future insists that journalists would be free to offer impartial views, distinct from the 'machine' of GoCompare which would offer up appropriate deals.
This would form part of a clear 'church and state' divide between the editorial and advertising arms of the business.
Future's ambition echoes the diversification strategies of other media companies, notably Shortlist which has become more reviews and products focussed even as it closes its struggling print operations.
The merger must now wait for from GoCompare shareholders and is expected to complete in the first quarter of 2021.