IAC buys About.com for $300m

29/08/2012

Media giant InterActiveCorp (IAC) is to buy online publisher About.com for $300m from the New York Times. Formed in 1997, About.com provided online guides written by freelancers, covering a wide range of topics. The About Group includes About.com, CalorieCount.com and ConsumerSearch.com, properties that offer basic information on a huge number of topics.

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In its last quarterly earnings, the New York Times Co. wrote off $195m for the group.

The New York Times had been on the verge of selling About Group to Answers.com for about $270 million. That deal would have included equity in Answers.com and be financed with debt, however.

The About Group was largely responsible for revenue declines at The Times Company last quarter. The company reported an operating loss of $143.6 million that quarter, after taking a $194.7 million non-cash writedown 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.

The About Group will become part of IAC’s Search and Applications reporting segment, under the leadership of CEO Joey Levin, which already includes Ask.com, Dictionary.com, Mindspark, nRelate and Pronto. Darline Jean, About Group’s CEO, will report to Doug Leeds, Ask.com CEO.

Greg Blatt, CEO of IAC, said the acquisition and its content library will mesh well with Ask.com’s search technology and user experience, and that IAC’s expertise will turn About Group around. “The complementary nature of these two businesses will provide significant synergies going forward, and thus we expect that About.com will generate more profit as a part of Ask.com and IAC than it has been able to over the last few years,” he said.

“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 theTimes Company to focus on the development and growth of our core brands locally, nationally and on a global scale.”

The Times bought About.com for $410 million in 2005. Like Demand Media, it depends primarily on search to generate traffic.

IAC owns and operates a number of Internet companies, including Ask.com, Match.com and Newsweek/The Daily Beast.

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