On the heels of buying digital marketing agency HelloSociety in March and design agency Fake Love in August, The New York Times has made another purchase: product-recommendation services The Wirecutter and The Sweethome.
Recode, which first reported the acquisition, put the cost at more than $30 million, but a New York Times spokesman declined to name the price. The Times spent approximately $12 million on HelloSociety, the company's chief financial officer said on an earnings call.
In contrast to the company's earlier acquisitions, The Wirecutter and sister site The Sweethome are editorial operations that have strong e-commerce-based business models. Products are recommended, and the company gets a cut of the money when readers decide to purchase them.
"It's an impressively run business with a very attractive revenue model and its success is built on the foundation of great, rigorously reported service journalism," Times Co. CEO Mark Thompson said in a prepared statement.
The New York Times, like most newspaper companies hit hard by industry-wide declines in print advertising revenue, is looking to generate more digital consumer and advertising revenue.
Mr. Thompson, in the release, said the Times is trying to become "an authoritative destination for service journalism." In addition to a Cooking product, the company also has verticals dedicated to entertainment recommendations (Watching) and wellness (Well). The Wirecutter gives the company a gadget-focused vertical, and The Sweethome provides recommendations about home products.
As digital media companies search for ways to actually make money from the content they produce, The Wirecutter has been lauded for its success. An April Bloomberg profile was headlined, "How a Small Tech Site Found a New Way for Publishers to Get Paid."
But Steven Kotok, who served as president of The Wirecutter before leaving recently to take a job as CEO of Bauer Media Group USA, said that revenue-focused coverage of the site was off-base.
"When we see people say The Wirecutter as a way to make money, we just laugh," he told Ad Age in September. "Because the whole ethos is to never think of money ... "
The goal of The Wirecutter is to produce quality content, and "money is an outcome of that," Mr. Kotok said.
Brian Lam, who founded The Wirecutter in 2011, will stay on in an advisory role following the acquisition.
"The New York Times is the perfect home for The Wirecutter because of our shared love and commitment to reader service and public good through rigorous reporting," he said in the statement. "And most important, we're thrilled to have the chance to help Times readers find great gear that can improve their lives."