Update: The news has now been confirmed. The $300 million acquisition price includes About.com, ConsumerSearch.com and CalorieCount.com and the deal will close in the next several weeks. Full release below.
Both AllThingsD and Reuters have reported a deal in the works, and we have now confirmed with a source very close to the situation that IAC is buying About.com from the New York Times Company for an all-cash sum in the region of $300 million. TechCrunch has also learned that the news is due to be made official either later tonight or tomorrow morning.
The source also confirmed that although Answers.com had also been interested in the information portal, its offer — reportedly valued at $270 million — was in debt and equity in Answers.com.
Whether it goes for $270 million or $300 million, it’s a discount on the $410 million the NYT paid for the site in 2005.
Alexa ranks About.com as number 37 in the U.S. in terms of traffic, and 80 worldwide. Its pre-Demand Media approach to acquiring content for low prices spawned some 900 subject sites with general interest information on topics like regional foods, parenting and technology. In that, it served as a counterbalance to the New York Times itself both in substance and in business model — the idea behind About.com being very high traffic and advertising sold against that.
However, whether it’s down to people’s online preferences (we have a million more places to get recipes for Red Velvet Cake now, although About.com’s is pretty good; and Wikipedia has become the default for so much general info) or Google’s search algorithm changes, traffic at the site ain’t what it used to be. In the last quarter, ad revenues were down nearly 9% to $25 million; operating costs were up by some 15% to $15.2 million; and the site had an operating loss of $187 million. In its quarterly earnings in July, the NYT wrote down the value of About.com by $195 million.
But if About.com’s declining traffic seemed to make the site less and less a good fit for the NYT, you can see how it would make more sense to have a home at IAC, which already owns a number of properties that also function on a similar business model. IAC can potentially pool its resources together to bring down some costs on the site, and About.com would become another outlet for the advertising network that runs across the rest of the IAC portfolio.
The New York Times Company Agrees to Sell Its About Group to IAC
NEW YORK–(BUSINESS WIRE)–Aug. 26, 2012– The New York Times Company (NYSE: NYT) has entered into an agreement to sell its About Group, which includes the Web sites of About.com, ConsumerSearch.com and CalorieCount.com, to IAC (NASDAQ: IACI) for $300 million in cash. The all cash transaction is expected to close in the next several weeks. The Company intends to use the proceeds for general corporate purposes.
“About.com has been a strong contributor to our company since its acquisition in 2005,” said Arthur Sulzberger, Jr., chairman, The New York Times Company. “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.”
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include risks detailed from time to time in The New York Times Company’s publicly filed documents, including the Company’s Annual Report on Form 10-K for the year ended December 25, 2011. The New York Times Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
About The New York Times Company
The New York Times Company (NYSE: NYT), a leading global, multimedia news and information company with 2011 revenues of $2.3 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, NYTimes.com, BostonGlobe.com, Boston.com, About.com and related properties. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news and information.