Barry Diller's IAC/InterActiveCorp has agreed to buy About.com from New York Times Co. for $300 million in cash, letting the company expand its Ask.com informational-website business and handing The Times Co. a better price than it seemed like it would get.
The transaction is expected to be completed in the next several weeks, The Times Co. said yesterday in a statement. IAC outbid an earlier $270 million offer from Answers Corp., according to a person with knowledge of the matter, who asked not to be named because the talks were private. The Times Co. will use the proceeds from the deal for general corporate purposes.
"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.
About.com, which relies 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.
Websites such as About.com, which depend on posting lots of inexpensive content, are also fairly prone to changes in search engines' algorithms. About.com suffered, as a result, when Google altered its methodology in an attempt to favor high-quality content.
IAC, however, saw revenue from Ask.com and its other search-related sites climb 46% to $348.8 million last quarter.
Greg Blatt, CEO of IAC, said in a separate statement that joining with Ask.com would help make About.com more profitable. "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.
The Times Co. has been unloading businesses and tightening the focus on its main media brand. It sold its stake in Fenway Sports Group, owner of the Boston Red Sox, for $93 million this year and completed the sale of its regional newspaper division for $143 million. The publisher still owns the Boston Globe and Worcester Telegram & Gazette newspapers.
The Times Co. bought About.com for $410 million in 2005. The website's revenue fell 8.7% to $25.4 million last quarter, and it posted an operating loss of $186.8 million as the publisher wrote down the value of the business unit to $172.5 million.
IAC -- founded by Mr. 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.com business, in addition to its flagship site, includes ConsumerSearch.com and CalorieCount.com.
The Times Co. on Aug. 8 said it was in negotiations to sell About.com, without giving details. A person with knowledge of the deal said then that the company was trying to sell the property to St. Louis-based Answers.
Ask.com, for its part, recently acquired nRelate, a startup that provides article-recommendation technology to thousands of small publishers. Besides incorporating the technology into Ask.com to help surface related content for web visitors, the deal could bolster the amount of content that Ask.com can make available to its readers, Ask.com CEO Doug Leeds said in a recent interview. Mr. Leeds said he envisions working with the small online publishers who use nRelate content-recommendation widgets to make their content searchable on Ask.com.
-- Bloomberg News --
Contributing: Jason Del Rey