Weather Channel: Why It Might Be Worth A $5 Billion Deal

The Weather Channel
The Weather Channel

I'll admit, even in sunny Los Angeles where the weather doesn't vary much, I check regularly. Needless to say, the decade-plus I lived on the East Coast, I checked the site daily.

I'm hardly special that way as I was just one of 32 million unique users that had last November, making the site more popular than CNN or Facebook. This fast-growing site is one reason that the Weather Channel, could bring in $5 billion dollars at the auction block for its private owner, Landmark Communications. Five billion dollars--that's as much as News Corp paid for Dow Jones.

Why the high valuation? People care about the weather. According to the former chief strategist at the company, who I talked to, the cable channel's revenues are over $300 million while its web site brings in over $100 million and growing fast.

Plus, there's its business-to-business service that sells weather forecasts to everyone from energy traders to insurance companies. And then there's the potential growth of mobile weather delivery to phones and PDFs like the iPhone.

All the media giants could be interested bidders. CNBC's parent NBC, is expected to be particularly interested since its Weather Plus unit never really took off. News Corp already made a deal for its MySpace to get info--it could use the company on Fox news as well as all its affiliates.

And Time Warner could be a natural buyer, if only because both the Weather Channel and its Turner cable networks are all based in Atlanta. Comcast , even Yahoo could be interested. The company may make a statement as early as today about the sale, but it is a private company, so don't expect much info until a deal is done.

Questions? Comments?