The Price is Right … or is It Wrong?
When CNET announced that it bought FindArticles.com from LookSmart, the first thing that crossed my mind was the The New York Times Company’s $410 million acquisition of About.com from Primedia three years ago. The Times’ deal added About.com’s 22 million monthly users, boat-loads of original content, and expanded the company’s online advertising inventory despite that About.com had “only” $40 million in revenue a year earlier.
The Times now says its About Group continues to be the company’s biggest revenue gainer with a recent report of ad revenues increasing around 40 percent in one month, which includes other Web sites in the group like ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com.
You could easily consider About.com one of the earliest-adopters of user-generated content, with its more than 600 contributors (“Guides”) writing about everything from buying pre-owned motorcycles to parenting a child with special needs, but I’ve never been a big fan and still think the Times overpaid for it. In the long-run, the About.com brand and domain name may end up having the most value, but for now it keeps chugging along.
Now back to CNET, which gets FindArticles.com - a business valued at $4.3 million - and its unoriginal content for $20.5 million. FindArticles.com provides free and for-fee access to more than 10 million articles from 3,000 news sources, likely including some of your own content.
CNET has picked a dead carcass off the road in an attempt to hunt down an even bigger technology audience in the most competitive and crowded online publishing sector. Regardless of your target audience, online publishing should be driven by the same key factors of print: audience, content and advertising, or ideally a generous combination of all three. You also could throw technology into this mix, but it’s becoming less of a factor.
With FindArticles.com, CNET has accomplished very little except to give LookSmart some much needed cash.