8:15 pm Aug. 26, 2012
The New York Times Company has just announced it has agreed to sell About.com to Barry Diller's digital media company, IAC, for $300 million in cash.
It's the latest move in the strategic repositioning exercise we recently reported on, in which the company is selling off assets that aren't part of the core New York Times brand and reinvesting the cash to expand its readership globally, incorporate more video, create a more socially engaged readership and work on capturing a larger market share of mobile news readers.
Sulzberger invoked the strategy in a press release announcing the deal, saying: "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."
In an unbylined Sunday evening post on the Times' Media Decoder blog, Diller was characterized as a late, dark-horse bidder:
IAC/Interactive made a surprise bid of $300 million last week after it had been widely assumed that The Times would sell to Answers.com for a reported $270 million. But as he has many times in the past, Mr. Diller won the day for IAC/Interactive, a company he has built out of a shopping basket of Web sites and services like Match.com, Ask.com and The Daily Beast.
Last quarter, the Times Company took a write-down of nearly $200 million on the property, which did great traffic from search engines but which recentlystarted to founder on its search-engine strategy.
An earlier deal, for $270 million, with Answers.com, looked all but done when Peter Kafka, media columnist at AllThingsD, broke news of the impending deal earlier this month. In his post, Kafka characterized the Times Company's struggles with About.com:
The paper has been looking to get rid of the struggling Web site, which produces high-volume, low-cost content, and has a deal in place to sell it to Answers.com.
In response to Kafka's report, the Times Company confirmed that About.com was on the block and that they were working on a deal, without saying who the buyer was.
The Times Company bought About.com for $410 million in 2005.
From the press release:
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.”