CNN plans to expand on the cheap


CNN Worldwide, a part of the Time Warner Inc. (NYSE:TWX) franchise, is expanding its staff of correspondents by 10% as it looks to increase its original content. The investment is said to be under $10 million and will add about 16 correspondents to its staff of 150.

About two months ago, CNN announced it was abandoning the relationship with Reuters Group PLC (NASDAQ:RTRSY) and would instead bolster its own news capabilities. The idea is to capture more advertising by owning the content as the content can simultaneously be pushed out over multiple distribution platforms.

What is interesting here, is that the focus is in the United Arab Emirates, where CNN operates CNN.com Arabic. It will use some of the investment for a digital production unit in London, as well as to increase its staff in Hong Kong. Mexico City and Johannesburg. Additional staff, and news operations are being planned in Belgium, Poland, India, Afghanistan, Nigeria, Kenya, Malaysia, the Philippines, and Vietnam.


Unless they have people working from home and working for $1.00 per day in these markets, it is a head scratcher how the company will finance all of those offices and all of the proper staff for such "just under $10 million."

Just two days ago, CNN announced its presence in Second Life, the defacto go-to alternative web world that links individuals and corporations alike. Content is king. That is true. For $10 million, assuming it is really only that, the company should a) be able to save payments made to Reuters, and b) increase ad monies as a result of owning the content source. But it's a wonder if the $10 million can buy all of the new news markets it wants to pursue.

Time Warner shares dropped 3.7% to $17.07 today, and shares put in a new intra-day 52-week low at $16.93.

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