New York Times Buys About.com from Primedia for $410 Million

**gonzo** · 02-18-2005, 10:59 AM

too bad they sold it at a $280 million loss.

New York Times Buys About.com
From Primedia for $410 Million

**Rik** · 02-18-2005, 11:00 AM

Husky latin Womens?

**gonzo** · 02-18-2005, 11:02 AM

Seeking a bigger piece of the fast-growing Internet advertising market, New York Times Co. said it is buying community portal About.com from magazine conglomerate Primedia Inc. for $410 million.

The acquisition is a further sign that interest in online media is intensifying again, several years after the dot-com bubble burst. Dow Jones & Co., publisher of The Wall Street Journal, last month bought business-news and financial-information company MarketWatch Inc. for $528 million. In December, Washington Post Co. said it was acquiring the online magazine Slate from Microsoft Corp.

About.com consists of a network of Web sites run by experts providing information on thousands of topics, from hobbies to personal finance. It reaches an audience of 22 million unique visitors every month, according to New York Times.

Print publishers have become increasingly interested in online properties of late because the rapid growth of online advertising, albeit from a small base, is appealing amid a slowing of growth in print advertising. Indeed, demand for Internet advertising has grown so quickly that many media companies are finding themselves without enough Web pages on which to sell ads.

MORE

• Read the transcript of the Times conference call, provided by Thomson StreetEvents (www.streetevents.com).

FURTHER READING

• Primedia Puts About.com on the Block
2/9/05

• Dow Jones Closes MarketWatch Deal
1/24/05

• Washington Post to Buy Slate
12/22/04

Besides providing additional online ad inventory to sell, About.com gives New York Times a chance to diversify its Internet advertising categories, Times officials said. The company's online unit is heavily dependent on display and classified advertising. Rates for display advertising traditionally are set based on expected readership. Half of About.com's revenue, however, is derived from "cost-per-click" advertising, in which advertisers pay rates that are based on the number of times readers click on an ad. New York Times says cost-per-click is a particularly fast-growing area of online ads.

New York Times, which offers free access to most of its Internet offerings, for years has been discussing putting more of its content behind paid doors. Martin Nisenholtz, the New York Times executive who will oversee About.com, said the purchase didn't signal any shift in the company's thinking on this matter. New York Times officials said they plan to keep the About.com name and will keep the unit distinct from the company's flagship NYTimes.com and other sites.

New York Times officials said they had been told there were two rounds of bidding for About.com. They said there was a "significant amount of interest" from other prospective buyers. Companies that looked at About.com include Time Warner Inc.'s America Online unit and Yahoo Inc., according to people familiar with the matter. Representatives for Time Warner and Yahoo declined to comment.

About.com was launched in 1997 as the Mining Company, later MiningCo.com, by Internet entrepreneur Scott Kurnit. Primedia, a special-interest magazine publisher whose titles include Motor Trend and Surfer magazines, bought About.com in late 2000 for around $690 million. After trying unsuccessfully to integrate About.com into its larger operation, Primedia reversed course and decided to operate it as a stand-alone business.

Primedia, controlled by buyout firm Kohlberg Kravis Roberts & Co., has been steadily selling off assets.

Michael Meltz, an analyst who covers Primedia at Bear Stearns Cos., said he was surprised at the price New York Times paid. "I don't know if lofty is the right word," he said, "but I'd say it's a good divestiture for Primedia." Mr. Meltz said he had been expecting About.com to be sold for less than $350 million. Catherine Mathis, a New York Times spokeswoman, said the price "compares well" with those for other recent Internet acquisitions.

New York Times said it expects the deal to close late in the first quarter or early in the second quarter.

**gonzo** · 02-18-2005, 11:04 AM

Originally Posted by Rik

Husky latin Womens?

Yeah, I don't know what the hell that is! Some soft core porn site must have gotten into my shit. If I cut and paste into word first and then here, the "husky latin women" magically diappear. Weird.

**jayfrizzo** · 02-18-2005, 11:05 AM

Gonz, why'd you post this?

Not trying to be a dick, just curious. I didn't think many people knew about About.

J-

**gonzo** · 02-18-2005, 11:10 AM

primedia owns powder and surfer and a bunch more. they were bought out by KKR who are now selling off shit they bought during the boom. they are also indirectly the reason we live here and not at Powder anymore, since Owens has control since there is little corporate BS at TGR, whereas Powder has one million vice presidents hierarchically higher on the totem pole than the editor.

or at least that is my impression.

**tuffy109** · 02-18-2005, 11:52 AM

yeah, but i can't run my cool-ass xterra ads here.

apparently yahoo and aol were also chomping on the bit as well.

about.com has seen its better ad days, don't know why nyt thought it would help increase their share of sales.

**skiguide** · 02-18-2005, 12:00 PM

I think Primedia is committed to its print brands and their corresponding websites, I don't know that I'd say they are looking to divest more.

-but they took a big hit by purchasing About.com for $600 mil - mostly cause it was at the wrong time - it was high right before the drop. So about's always been the red headed stepchild.

Ad sales have been trending back up for the last 2 years, mainly from Google ads. But the traffic & Pageviews are there, so it's still a very viable ad network.