New York -- While rumors have been swirling lately that Answers.com was a likely buyer for About.com and its associated properties, but the event took a surprising twist today as IAC's search division Ask.com has agreed to acquire the content site for US$300 million in cash, noting that synergies between both companies will boost profitability of About and credibility of Ask.
AllThingsD first reported that Answers.com was eying About.com earlier this month for around $270 million, but later citing unnamed sources, both AllThingsD and the Times reported ahead of the announcement that IAC made a “surprise bid” last week with its offer of $300 million in cash.
In a press note Monday, IAC CEO Greg Blatt said the acquisition was “completely in line” with the company's mergers and acquisitions policy and the two businesses were “complementary and synergistic”.
“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,” Blatt said.
To surmise, the sale of the About Group ends the chapter on what was once a solid pillar of the New York Times digital strategy. The publisher of the New York Times and Boston Globe newspapers acquired About for $410m in 2005. The site delivered profits for a number of years but its business recently has been a drag amid declines in traffic and advertising revenues.
Lately, the company reported an operating loss of $143.6 million that quarter, after taking a $194.7 million non-cash depreciation for the About Group. Falling display and cost-per-click advertising revenues at the Group also led overall declines in print (-8%) and digital (-4%) advertising across the company.
In the same press note, Joey Levin, CEO of IAC search and applications, said that About.com gives a “tremendous amount of quality content” to further enhance user experience and credibility of the Ask brand. “[IAC] can now market and distribute that content and the About brand through Ask, and significantly increase traffic and profitability at About,” Levin said.
About.com, which mainly depends on freelancers to produce stories and how-to videos on topics such as making a stir-fry or preventing a tattoo from stretching, has struggled to attract traffic and advertising dollars. With its collection of instructional articles across a plethora of topics, About.com was able to milk search engine traffic to drive its ad revenues. But as Google regularly optimizes its search algorithm and ad rates fell, the site ended up dragging down the NYT’s financials down the drain.
The NYT says the all cash transaction is expected to be completed within the next several weeks, and that the proceeds will be used for “general corporate purposes.” The About group includes to-do site About.com, CalorieCount.com, and ConsumerSearch.com.
“This sale will allow the Times Co. to focus on the development and growth of our core brands locally, nationally and on a global scale,” Chairman Arthur Sulzberger Jr. said in the statement.
IAC--founded by Diller, a 70-year-old billionaire--runs dating sites Match.com and OKCupid and has a controlling stake in Newsweek/Daily Beast Co. The About Group will join IAC's search and applications reporting segment of Ask.com, Dictionary.com, Mindspark, nRelate, and Pronto, IAC said. About CEO Darline Jean will report to Doug Leeds, the CEO of Ask.com.
In the press note, Blatt said, this acquisition will certainly help About.com, a content and references site, generate more profit as part of Ask.com and IAC.