Fox Interactive is in the closing stages of acquiring unlaunched startup NewRoo for “less than $10 million,” according to very reliable sources.
This follows Fox Interactive President Ross Levinsohn’s dramatic announcement at a recent UTR conference that “they’ve acquired someone in this room,” leading to serious blog speculation as to who the acquired company might be. While NewRoo did not present at the event, it turns out that they were in fact in the room at the time.
NewRoo is a real-time news aggregator that allows users to create their own customized news and content pages. The company has not launched. See my previous post on NewRoo for a full profile of the company.
While this is a small acquisition for Fox, there is a clear product synergy with their Myspace and Fox Sports online properties – users of those sites can create their own music/youth related content sites in the case of Myspace, or sports related news sites in the case of Fox Sports. Given Ross’ stated infatuation with user-generated content, it isn’t hard to see how NewRoo’s technology can add to their overall strategy of generating more page views without paying for the actual content generation.
UPDATE: Rafat at PaidContent says Yahoo was also in the running to acquire NewRoo. It’s always good to have (at least) two horses in the race – the acquisition price tends to go up dramatically.