The Price For ReadWriteWeb Was Around $5 Million

Next Story

@louisck Reports His Content Experiment Sold $500,000 Worth Of Downloads

Tech blog ReadWriteWeb was acquired today by SAY Media, as was previously reported. I’ve found out a few more details. The price SAY paid out was under $5 million, after the assumption of ReadWriteWeb’s liabilities, according to a source privy to the details. The company’s liabilities weren’t huge, so the total acquisition price was somewhere around $5 million.

Staff are being asked to sign new contracts with SAY Media today, with contracts going through March, 2012. And a redesign will probably roll out sometime in the first quarter.

SAY Media is itself a result of a merger last year between video ad network VideoEgg and blogging platform Six Apart. ReadWriteWeb is the third online media property acquired by SAY this year after Dogster and Remodelista. (It also acquired digital agency Sideshow).

Why is an ad network buying up media properties? SAY Media is not alone in this strategy. Look at how Glam Media started out as an ad network and then aded on owned-and-operated properties or, for that matter, AOL (which bought TechCrunch and the Huffington Post, but also runs a huge ad network).

It used to be that publishers sold ads in their own media (magazines, newspapers, TV). When ads moved online, ad networks emerged to provide scale across the Web so that advertisers could reach mass audiences. But the price for an ad on a publisher’s site with a highly-focussed audience like ReadWriteWeb is much higher than a run-of-network ad that could run basically anywhere.

Online, you need both an ad network and owned-and-operated sites. The ad network gives SAY Media the scale to attract advertisers in the first place, and the owned sites will juice the average CPMs it can charge. (Here is RWW’s post on the deal).