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Digital media veteran Jon Miller, backed with money from TPG, is going shopping for websites

They bought Fandom last month, and they want more.

A screenshot of the website Fandom, showing a still from the movie “A Wrinkle in Time,” a picture of a mechanical giant from “Pacific Rim” and a drawing of a little green alien from “Final Space.” Screengrab via Fandom
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

A few years ago, investors were optimistic about digital media companies. Now they’re not.

Time to invest in digital media companies.

That’s the thesis, more or less, behind a new effort from Jon Miller, a longtime digital media exec, and TPG, the giant private equity fund.

Some details: Miller, who ran AOL for four years after the first web boom and spent years as Rupert Murdoch’s top digital exec, wants to create a portfolio of digital media companies, organized around a few different themes. TPG, which manages a $79 billion portfolio, will back Miller with funding to do the deals.

Both Miller and TPG declined to comment about their plans, but industry executives have been hearing about them for a few weeks.

Last month, TPG and Miller (barely) announced their first deal — an acquisition of Fandom, a network of pop culture sites formerly known as Wikia — without spelling out the deal terms or their overall plans.

People familiar with that deal say Miller/TPG acquired majority control of Fandom at a valuation of more than $200 million. The plan is to eventually buy other, complementary entertainment properties and make them more valuable by consolidating some services like sales and back office operations, while figuring out how to create new revenue streams.

Miller might try to do the same thing with women’s lifestyle sites or other verticals.

Miller has talked about building up a network of digital properties for years. He’s deeply influenced by his former employer Barry Diller, who assembled his own group of connected assets — like travel sites — at IAC.

I don’t know how much Miller/TPG plans to spend on this strategy. But TPG likes to write substantial checks, and they have apparently spent more than $100 million on their first investment. And it looks like their plan involves similar deals, so you can extrapolate.

TPG/Miller aren’t the only ones looking to bulk up on media in 2018. For instance: Variety owner Jay Penske, who bought a controlling stake in Rolling Stone late last year, just raised more than $200 million from Saudi investors so he can add to his portfolio.

And if you want to buy media assets in 2018, you are very likely to get better deals than you would have a few years ago.

Many digital companies’ high-flying growth plans have sputtered out, as Google and Facebook dominate the market for digital ad dollars. Late last year, for instance, Mashable went for a fire-sale price; now some Facebook-dependent properties are folding altogether. And both BuzzFeed and Vox Media, the company that owns this site, have had layoffs.

And there’s more inventory coming on to the market, which may well put more pressure on (theoretical) prices. Magazine giant Meredith, for instance, is figuring out which pieces of Time Inc. it wants to keep after buying the storied publisher earlier this year.

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