Guardian sells PaidContent to GigaOM
GigaOM has strengthen its position in the technology news market, against rivals such as Techcrunch, having agreed to buy paidContent publisher, ContentNext Media, from Guardian News & Media for an undisclosed sum.
GigaOM picsk up the main paidContent website, paidContent:UK, and its events business as well as mocoNews.net and contentSutra.com.
The Guardian put ContentNext on the block Back in November with talk of a $20m price tag.
However, it is thought that the business, which was founded in 2002 and bought by the Guardian in 2006, went for considerably lower price tag.
Paul Walborsky, GigaOM’s chief executive told the NY Times’ DealBook that ContentNext was a “good fit, because they cover how media is evolving and how technology influences that change”.
Here is GigaOm’s Om Malik’s blog post on the subject, which goes into the details:
First the news: Yes, the rumors are true. We are indeed buying the assets of ContentNext Media from Guardian News & Media Limited. And no, we are not disclosing the terms of the deal, except that we are buying the entire group of properties — paidContent.org, mocoNews.net, contentSutra and paidContent:UK and that a representative of Guardian News & Media will join our board of directors as an observer.
A few weeks ago when Paul Walborsky, CEO of GigaOM, came to the board and suggested that we should try and acquire paidContent, my fellow board members — Jon Callaghan (True Ventures), Ammar Hanafi (Alloy Ventures) and Kevin Brown (Reed Elsevier Ventures) — didn’t hesitate for a minute. The ethos of paidContent and our company are in sync. GigaOM’s core belief is that as connectivity becomes ubiquitous, it changes everything from society to business to we the people. paidContent from the very beginning has been built on the idea that connectedness is and will change media. It makes perfect sense for us to team up. Since then, Paul and his team worked tirelessly to make it happen.
OK, now you know what. Let me tell you why.
Now, why are we doing this deal, clearly the biggest of our five-and-a-half-year history? Two simple but equally powerful reasons — the first and perhaps most important reason: people. I have been an admirer of paidContent’s editorial team from the very beginning of its journey. Rafat Ali and Staci Kramer were two of my favorite writers in the early days of professional blogging. And while Rafat (who is on our board of advisers) has moved on to new things, I am glad to have Staci join us. She has been instrumental in building ContentNext from the ground up, and in addition to writing, she has been building the company’s event business. I am thrilled to announce that she will remain the editor of paidContent.
Ernie Sander who spearheads the ContentNext editorial operations is the kind of veteran everyone on our team, including me, can learn from. And for that precise reason, Ernie is going to become the executive editor of our sprawling online editorial operations. Our managing editor, Nicole Solis, is being promoted to VP of Editorial Operations. And then there is the most awesome team of journalists — Robert Andrews, Tom Krazit, Daniel Frankel, Laura Hazard Owen, Jeff Roberts and Amanda Natividad. In addition there are a wonderful group of technology, business and sales people who are joining our company. I welcome them all to our growing family and can’t wait to break bread with them in weeks to come.
Location, location, location
These fine folks are actually going to help bolster our presence in New York and help increase our footprint in Europe, a region of key strategic focus for GigaOM. (We will be hosting Structure:Europe in Amsterdam, October 16-17.) With this deal, we are really pleased that one of the most forward-looking media outlets around, Guardian News & Media, will become a shareholder in our business.
As you all know, I am (and will always be) a displaced New Yorker; New York City is my spiritual home. By increasing our footprint in the capital of the world, I would get a chance to go back more often. But it’s not an emotional tug that is driving us to this decision. New York is fast becoming a major technology hub, as Ryan Kim outlined in his recent post. And we want to expand our coverage to Boston — thanks to Barb Darrow who joined us several months ago — and the Washington DC corridor as well. paidContent’s New York City offices are now GigaOM East.
Media is the new Wild West
We are quite strategic about our acquisitions — we acquire media entities only if we love the people and believe that we are at the starting phase of a trend. In 2008, we acquired jkOnTheRun as our tip of the hat to the growing demand for mobile devices and the changes it would bring into society. Later that year, we brought in The Apple Blog because we knew the best was yet to come for Apple. Both of those acquisitions have helped GigaOM cover the issues that matter most to our ultimate customers — you, the reader — in a smart, sensible fashion.
“The question that mass amateurization poses to traditional media is ‘What happens when the costs of reproduction and distribution go away? What happens when there is nothing unique about publishing anymore because users can do it for themselves?’ We are now starting to see that question being answered.”— Clay Shirky
Shirky’s observation means that we are in a time of chaos where the very idea of media is being questioned. And as a Chinese proverb says, from chaos emerges opportunity. I believe the best is yet to come for media.
Over the past few years we have started to see the transformation of media by new technologies, new methods of distribution and newer ways to consume information. Mathew Ingram has been writing about these disruptions on a regular basis, and now we are going to double down on what we think is a great new chapter in the media industry.
I have always believed that we’ve got to stop thinking of media as what it was and focus on more of what it could be. In the world of plenty, the only currency is attention and attention is what defines “media.” Zynga is fighting Hollywood for attention (and winning). Instagram is taking moments away from other media. They have attention. There are old companies that are dying and new ones that are being invented. We’re eager to expand our coverage of social and digital media editorially, in our research and at our events. paidContent is the best chronicler of the media industry, and by blending their coverage with ours, we hope to watch this fast-changing industry ever more closely.
GigaOM’s acquisition comes as consolidation is increasing in the digital media industry. Over the last year, several technology and business news sites have been folded into larger media organizations. Last fall, AOL purchased TechCrunch, a GigaOM rival, for tens of millions of dollars. In December, SAY Media acquired ReadWriteWeb, another popular technology blog, for an undisclosed sum.
The Guardian, best know for its namesake British publication, acquired ContentNext in 2008 for 4 million pounds, according to a report by the Guardian, citing financials disclosed in 2010. But it has since cooled on its investment, turning instead to focus on building its Guardian brand in the United States. In November, the company announced it was putting ContentNext up for sale.
“The Guardian’s focus in the US is on building guardiannews.com, but we look forward to seeing paidContent thrive and grow in its new home and wish its staff all the very best for the future,” Andrew Miller, the chief executive of the Guardian Media Group, the parent company of Guardian News & Media, said in a statement.
With the acquisition, GigaOM will add 15 additional employees to its staff of 40, and expand its footprint in the New York and European markets. Like GigaOM, ContentNext also hosts conferences, which generate revenue through attendance and sponsors. The Guardian will retain a minority share in ContentNext and will hold an observer seat on the board.
ContentNext’s network of sites attracts about 726,000 users and 1.5 million page views per month.
“Technology is an important asset class for investors,” Mr. Walborsky said. “And we believe, if you want to cover technology you have to go global.”
Founded in 2006 by journalist and technology investor Om Malik, GigaOM attracts about 4.5 million visitors per month. It has raised about $15 million from its venture capital investors, including Reed Elsevier Ventures, Alloy Ventures and True Ventures. But it has been fairly conservative with its balance sheet. ContentNext is the company’s largest acquisition to date, it previously acquired two small technology news sites in 2008.
AllThingsD first reported GigaOM’s acquisition of ContentNext.