Primedia's Niche Strategy

Click here for the latest from James J. Cramer.

Is Primedia's (PRM:NYSE - news - boards) decline today because the market hates dot-coms? Or is it a particular dislike of the dot-com that Primedia bought? I think it is the latter. Most people feel that About.com (BOUT:NYSE - news - boards) is a loser compared to AOL (AOL:NYSE - news - boards) and Yahoo (YHOO:Nasdaq - news - boards). I can't tell you I am not one of them. I think that the portal game is largely over and it has been won. About.com lost the war and no matter how many times it tells you things are great, people sell it anyway.

That said, I think Primedia, for whom I write as part of my columnist job with New York magazine, will be rewarded if it can take all of its niche magazines and push them through niche Web sites. It doesn't need a portal. It needs a niche strategy and it got it with About.com . In spades.

In other words, I think the market is wrong about this acquisition. Bob Pittman has said that he sees lots of subscriptions for Time Warner's magazines starting with AOL. Hard to believe that Primedia's trade publications couldn't be similarly well rewarded. Should you buy Primedia? Oh man, you cut me to the quick. I am conflicted because I work with them, so I am not buying it. But selling it here seems just downright stupid. This niche acquisition of a niche player to build the niche of niche magazines makes too much sense to me.

---

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long AOL. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to send comments on his column to James J. Cramer.