IAC Agrees to Buy About.com for $300 Million in Cash
The transaction is expected to be completed in the next several weeks, 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. 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. By contrast, New York-based IAC saw revenue from Ask.com and its other search-related sites climb 46 percent to $348.8 million last quarter.
IAC will add answers from About.com into searches on Ask.com, just as it does with free content from Wikipedia, the online encyclopedia, Chief Financial Officer Jeff Kip said. That, along with advertising alongside Google searches, will help revive About.com, he said.
“Being able to boost this content on the Ask site will improve the search experience, and then Ask drives more traffic to About,” he said. “This is a great financial deal.”
IAC came into the deal after an exclusive negotiating period between Times Co. and Answers.com ended. About.com will continue to operate separately, with executives reporting to the head of Ask.com, Kip said.
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.
Times Co. purchased About.com for $410 million in 2005. The website’s revenue fell 8.7 percent 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 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.
Times Co. said Aug. 8 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.
IAC shares increased less than 1 percent to $51.92 at the close in New York. The shares have gained 22 percent so far this year. Times Co.’s stock slid 1.2 percent to $9.11, cutting its year-to-date gain to 18 percent.
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