Yahoo has announced that it has acquired Associated Content for an undisclosed sum. Several sources put it at $90 million to $100 million, with the first sum being the most likely. Yahoo says the move will bolster its content offering especially for niche interests. It plans to expand Associated Content’s current platform globally and integrate the two companies’ content-generation and -advertising networks. The move is a shift in strategy for the Internet giant, which, though having been more interested in content lately, has been focused on the higher end of the quality scale.
"Combining our world-class editorial team with Associated Content's makes this a game-changer," Carol Bartz, CEO, Yahoo! Inc., said. "Together, we'll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we're one of the most visited destinations online."
Associated Content is a new breed of online content creators that focus on publishing massive amounts of search-driven material, text, video, audio, etc., to cover small niches that wouldn’t be of interest to players with a dedicated, and expensive, editorial team. It relies on a small army of freelancers, it has 360,000 contributors at this point, to create content based on topics that are determined to rank high on search engines. Its contributors create 50,000 pieces of content every month, according to the company’s own numbers, for which it pays sums starting at several dollars a piece.
It was launched in 2005 and has published two million articles since, on its own properties as well as partner sites. It gets about 16 million unique visitors per month, according to comScore numbers, and its content has had 1.75 billion page views so far. Yahoo has some 600 million users across all of its online properties and hopes to expose that audience to the type of content its latest acquisition provides.
Associated Content competitors include Demand Media and, to a degree, AOL. Demand Media has an approach very similar to content generation, but has been more successful and has a broader offering. It is looking for an IPO at a multi-billion-dollar valuation. AOL has the SEED program
, which uses the same contributor-approach to content creation. In fact, AOL CEO Tim Armstrong is an angel investor in Associated Content, which raised $21 million in funding in its lifetime. It has been looking to sell for several months. Both AOL and Demand Media were seen as potential buyers at some point. Interestingly, Yahoo also looked into buying AOL and Demand Media in the past.