Update: The NYTCo is confirming that it is in talks with Answers.com concerning the sale of The About Group. Read the release.
We've been hearing rumors the past two days that the New York Times Co.'s About Group, which has been experiencing steady revenue declines the past year, is being sold to Answers.com. Interestingly, Answers.com's president and COO is none other than Peter Horan, the former About.com head who helped engineer the sale of the About to the NYTCo in the first place.
The NYTCo, Horan and About reps would not confirm or deny the rumors, citing policies about not commenting on rumors. But several sources tell AdExchanger that the deal could close in a matter of weeks, confirming a report by AllThingsD's Peter Kafka, who writes that the Horan's Answers.com is working with its investors, Partners and TA Associates, to line up additional backing for what could be a $270 million deal -- significantly less than the $410 million the NYTCo paid for About in 2005.
While About has appeared to be unable to reverse the year-over-year revenue declines, it still generates a healthy amount of revenue, roughly $100 million-plus a year. But as the NYTCo continues to deal with half a billion in debt, another half billion of pension liabilities, pouring more money into a business that is barely ancillary to the core product of news makes even $270 million an attractive offer at the moment.
For Q&A site like Horan's Answers.com, About and its properties -- the main guide site About.com, ConsumerSearch and Calorie-Count; The company sold About’s UCompareHealthCare.com unit to MDxMedical in February of last year -- makes a lot of sense. About has worked to avoid the "content farm" tag that many "how to" sites are tarnished with, as it has worked to build up premium display sales in the face of falling cost-per-click revenue ever since Google adjusted its search algorithm a year-and-a-half ago.
It's the dependence on search -- and the inability to do anything from an SEO standpoint -- that made About look worse than it actually is. During its Q2 earnings call, NYTCo executives did point to a slight turnaround in CPC ads at About. But it also noted that it took an estimated non-cash charge of $.85 per share for the write-down of goodwill at the About Group, suggesting that while progress was being made, it wasn't enough.
The deal follows some executive upheaval the past year as well. In May 2011, former Digitas executive Cella Irvine, who had presided over an earlier rebound of the About was ousted after three years as CEO of the unit. At the time, About had gone through three consecutive quarters of revenue decline, although 2010 did end with modest revenue gains. (Nearly a year ago, Irvine became CEO of contextual ad firm Vibrant Media).
About has sought to balance display with CPC as display continues to rebound. But About was never a destination site -- it was all about search and the ability of its nearly 1,000 guides to drive traffic and the revenue that comes with it.
Before Irvine's departure, she attempted to mitigate About's problems by working to create a Spanish language version to draw the growing U.S. Hispanic audience. In addition, she planned to add more video as well. Those plans were kept in place by current CEO Darline Jean, an About veteran. An About rep added that in her previous role as COO, Jean played an integral part in shaping those plans. She will likely stay on in the role.
It's hard to say how deeply About and its properties will be integrated into Answers.com, but Horan certainly knows the business well. And considering that Answers.com is a private company, the year-over-year comps that About had trouble maintaining will be less of a concern (or at least won't be as much of a focus in the press at least.) For a few years, About was able to help advance the NYTCo's digital strategy. By aligning with Answers.com, which is still run by CEO and founder David Karandish has a much more comprehensive social media and mobile strategy than About, it's likely that Horan will be able to build on the slight progress that has been made in Q2. And the NYTCo can get back to streamlining its business, pay down some debt, and concentrate on the digital activities of its flagship.