Rumours began circulating earlier this month that InterActiveCorp (IAC), the online media company headed by old media icon turned Internet mogul Barry Diller, had made an offer to the New York Times to purchase About.com, an information resource site. Other companies said to be interested in the property were rivals Demand Media, and Answers.com, which reportedly signed a letter of intent to purchase About for $270 million (£171 million) just weeks earlier. But on Sunday the New York Times confirmed the sale of the site to IAC for $300 million (£190 million).
While the £190 million pricetag might seem steep, it could actually be deemed a bargain considering the fact that the New York Times bought the site for $410 million (£260 million) back in 2005. When the Times first acquired the site it was thought that it might be the perfect back-end information compliment to the company's more editorial-focused news site. But as the paper has struggled to find its digital footing while managing the flagging fortunes of the print media market, selling the property is being framed as a way for the company to shore up its bottom line and devote more resources to its core brand.
"About.com has been a strong contributor to our company since its acquisition in 2005," New York Times Company chairman Arthur Sulzberger, Jr. said in a statement. "About's early expertise in search engine optimization, expert content and revenues from cost-per-click and display advertising made it a valuable component of our portfolio for the past seven years. This sale will allow the Times Company to focus on the development and growth of our core brands locally, nationally and on a global scale."
With approximately 100 million unique visitors per month, About is one of the leaders in the field of human-curated online databases, competing with the likes of IAC's own Ask.com, Demand Media's group of sites (including eHow, LiveStrong, and others), and even the non-commercial Wikipedia.
"The About.com acquisition is completely in line with IAC's M&A strategy," said IAC CEO Greg Blatt. "About.com's content will differentiate and greatly increase the authority of Ask.com's offerings, while Ask's expertise in search technology and user experience will improve the discoverability of existing content on About.com... thus we expect that About.com will generate more profit as a part of Ask.com and IAC than it has been able to over the last few years."
The commercial versions of these human-curated sites, often referred to, somewhat derisively, as "content farms," offer varying degrees of category-specific information and guidance cobbled together bit-by-bit by large teams of paid contributors. Over the years, these sites rose to success based primarily on user discovery via high search engine rankings. And while it's true that Alexa currently ranks About at 37th in traffic in the US, such sites have begun to gradually lose ground on Google as the search engine has rejiggered its search algorithm in a manner that no longer favours such search engine optimised (SEO) sites.
Nevertheless, the fact that IAC was willing to put up £190 million in cash - as opposed to the Answers.com bid, which reportedly included equity and debt financing - indicates that Diller and his executive team believe that About can boost the standings of its stable of database sites such as Ask.com, Dictionary.com, CitySearch, and the once great, but now all-but-forgotten Excite.com.
"This is a rare merger with true bilateral synergies... About.com has created, and today continues to grow, a library of content which consumers love across a vast array of categories, and we can now market and distribute that content and the About brand through Ask and significantly increase traffic and profitability at About," said Joey Levin, CEO of IAC Search & Applications.