New York Times Buys About.com for $410 Million

That's a lotta cheddar.

[stuntdubl]

The New York Times Co. on Thursday said it will buy online information portal About.com for $410 million from publisher Primedia Inc. as it looks for new ways to advertise itself online.

Full Article [money.cnn.com]

Good to see the traditional media taking a stab at new media promotion methods. It'll be interesting to see what they do with it.

[Sanenet]

Well, so much for the Google rumour.

The Times Co. said it paid a multiple of 23 times About.com's estimated 2005 earnings before interest, taxes, depreciation and amortization.

23 times times EBITA? That's a brave move when you think that if they are going to try to use about.com to promote it's businesses, it's a new step for them.

[Brett_Tabke]

Shake head - this is one I just don't get. Seems to be a play from the bubble playbook than one from web reality 2005. That price is very impressive - hats off to the about.com gang - polish the resumes.

[httpwebwitch]

hmm.
about.com has around 1,800,000 pages of content
(that's a selling price of $227.78 per page).

I'd sure like to sell my website for $410M. I spoze I've got some more writing to do, hi ho hi ho

[EliteWeb]

Wow, are you going to have to register to read articles now? I feel it coming.... ooOo so close.

[lorenzinho2]

Has anyone seen an estimate of what About does in revenues? I'd be curious as to the revenue / sale multiple.

[lorenzinho2]

So let's make a rough stab at full year revenues (which are announced at the end of February). For the purposes of this exercise we'll pencil in $730m sales for Primedia's Enthusiast Media division. Now let's assume that online revenues accounted for six per cent of turnover. That comes in at $43.8m. But don't forget that Primedia has other online properties as well as About.com - websites which accompany its many print publications. So it looks like NYTimes is paying as much as 10x revenues for About.com.

From the Register:

[theregister.co.uk ]

[Chndru]

all in cash. wow.

[np2003]

Maybe the NY times editors saw that Flash video (future prediction) whereby Google takes over everything related to news/web?

<snip>

[edited by: trillianjedi at 11:15 pm (utc) on Feb. 18, 2005]
[edit reason] Let's stick to authoritative/news links [/edit]

[martinibuster]

What's really interesting here (for me) is that Google showed an interest in buying a content property. Not a company that helps organize content, but actual content itself.

Certainly, orkut and googlegroups kind of fall into the categories of content, but about.com is on a different level.

So this appears to signal a change in focus for Google away from content organization to content provider. This has been Google's disadvantage and Yahoo's advantage when selling advertising because Yahoo can show movie trailers, flash animations, whatever it wants wherever it wants. Google is stuck with those little pink boxes. :( Must give Google's Sale Dev Team headaches to see big advertisers walk away into Yahoo's embrace.

Yahoo is moving big time into content development and presentation. Might be this is a flicker of a broadened focus at Google in the future? Or was it a ploy to foil Yahoo's purchase, or could it have been a half hearted attempt to acquire some content?

[Sanenet]

I can't help feeling that Google is not in a position to move into content developments. It's entire business focus is in content promotion - buying about.com just wouldn't have fitted into their business structure.

Certainly there's an argument that since Google has such a large slice of the PPC market, developing it's own content to promote their ads on is a logical step, but I personally believe a site like about.com would be stifled under the Google structure.

On the other hand, a content developed like NYT would be able to give about.com a huge push. How many years of content about specific subjects do they have? Imagine searching for, say, Nigeria, and getting not only a page about Nigeria now, but NYT stories about Nigeria for it's entire history, plus plugins to hotels, flights, travel books, etc, etc (and anti fraud campaigns as well ;)).

Googles strength lies in supplying the links and the audience, not the destination.

[np2003]

IMO, Google will get into business where it can show AdSense ads, this could include offering free hosting, buying other large content sites, offering free email services.

[kaled]

Any cash-rich business in a volatile environment would be wise to diversify. It should then use its strengths to bolster and build up the new business. The mistakes some businesses make are to stretch too far and loose focus on the core business.

The price was silly but it might have made a good acquisition for Google at, perhaps, half that figure.

I don't understand how the NYT can justify that kind of money.

Kaled.

[larryhatch]

Hi Kaled, I agree. Most newspapers are lucky to stay afloat.
I know, my brother-in-law was business editor for a small weekly in California.
Note I say "was", it sank without a bubble.

41% of a BILLION dollars for About.com?
I can think of a lot better uses for that kind of money.
- Larry

[SlyOldDog]

>>I don't understand how the NYT can justify that kind of money.

Desperation?

I hear Rupert Murdoch is on the prowl too.

[walkman]

"Desperation?
I hear Rupert Murdoch is on the prowl too."

that's part of it. They're afraid of being let out of the game. Remember the late 90's when you had to buy somethign otherwise you weren't "cool"?

[john316]

The sleeping giants are waking up.

Remember when google used to call their SERPS "editorial results"?

Its not tech anymore its social: Who ya gonna trust?

[GameMasterM]

If the sleeping giants are waking up who will Time Warner target? It is fairly obvious they are in the process of marginalizing Google as the primary search provider for AOL.

[EquityMind]

The game is going to get really serious in 2005. This is just the start (again), and corporate america is once again putting out their feelers for interesting web properties to acquire. I hear it all the time from my offline clients that are desperately seeking an online marketing strategy.

[xalex]

Really how many people uses About.com? I always wondered why that company hasn't got bust with the bubble. I don't recall finding anything useful there ever. This probably is one of the worst move ever. Can NYT even survive the onslaught of FOX for the next 5 years? Even CNN is on the verge of the collapse

[europeforvisitors]

The PressLink blog at New York University has some interesting quotes from Jakob Nielsen and others on the About.com acquisition, including a statement by a v.p. of digital operations at The New York Times Co. who said: "Frankly, they bring a lot of competencies to us. They're the leaders in search-engine optimization."

$410 million for SEO? I'll bet they could hire Marshall Simmonds, About's director of search, for a fraction of that. Marshall would could buy up his home town in Oregon and appoint himself mayor, and the NYT would have $400 million left over to spend on developing real Web content.

See the story at:

[journalism.nyu.edu...]

(By the way, I can't take credit for finding this; I learned about it from a fellow ex-guide at About.com.)

[cooldoug]

Waste of money ;)

[lorenzinho2]

EFV, I was thinking the same thing. I wonder exactly how much About's handmade title tags, optimized pages, and more importantly, internal SEO processes for guides / editors jacked up this price tag. And if that's the case, NYT will need to pray that an Allegra like shake up doesn't change the rules on them.

On a related note, does anyone ever visit About.com through the home page? Or do they, like me, just stumble on to deep pages through Google?