The acquisition comes after the newspaper company failed to acquire business and financial information provider CBS MarketWatch, which was bought by Dow Jones & Co., publisher of the Wall Street Journal, for $528m last month. Washington Post Co. also purchased Microsoft’s online magazine Slate last December.
About.com is the latest to join The New York Times Company’s collection of web sites, which include NYTimes.com, Boston.com and 40 others. The newspaper company expects to build upon its monthly user base of 13 million with About’s 22 million monthly users in an effort to increase advertising revenue.
The Times Company said it will intend to use the acquisition to promote its own products and vary its internet advertising categories by exploiting About.com’s cost-per-click advertising, which charges advertisers a fee based on the number of times readers click on an ad, a method that the New York Times believes is a fast-growing area of online advertising.
Additionally, the Times Company will aim to keep About.com detached from its own operations by allowing the web site to run as its own separate business division under its existing name.
The global reach of About.com and opportunities for cross-promotion between its channels and our digital properties will be additive for both businesses, said Janet Robinson, CEO of The New York Times Company. With the Times Company behind it, About.com is poised to grow even further, benefiting The New York Times Company and its shareholders.
The Times Company hopes the acquisition will start earning in 2007 and plans to structure About.com as a cash for stock purchase, treating it like an asset purchase leading to tax deductions worth over $80m.
