New York Times Shares Rise on Deal to Sell About.com
New York Times Co. (NYT) climbed 6.1 percent after the newspaper publisher entered talks to sell About.com, aiming to salvage a portion of its ill-fated bet on the website.
The company confirmed the negotiations in a statement today, without giving details. A person with knowledge of the deal said the New York Times is trying to sell the Web property to Answers.com for $270 million. The proposed deal was reported earlier today by the AllThingsD site.
The shares rose to $8.57 at the close in New York, the most since July 26. The stock has climbed 11 percent this year.
The move would further the New York Times’ strategy of offloading businesses and tightening its focus on the New York Times 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 company purchased About.com for $410 million in 2005. The site, which relies on freelancers to produce stories and how-to videos on a wide range of topics, has struggled to attract traffic and advertising dollars. About.com’s revenue fell 8.7 percent to $25.4 million last quarter, and it posted an operating loss of $186.8 million as the New York Times wrote down the current value of the business to $172.5 million.
Answers.com, a similar site that calls itself “the most trusted place for answering life’s questions,” was founded in 1998. The St. Louis-based company didn’t respond to requests for comment.
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