LET’S TALK ABOUT A SALE…: The New York Times confirmed Wednesday it was in talks to sell About.com, a how-to reference site that had in recent years dragged down the company’s bottom line. The sale underscored the Times’ renewed focus on its signature brand at the expense of its subsidiary assets, like the Regional Media Group and its stake in the Boston Red Sox, which it has sold in the last year.
The Times bought About.com in 2005 for $410 million and for several years the Web site provided financial ballast as print advertising revenue and circulation declined. Shareholders at times disputed the wisdom of the purchase — a Morgan Stanley money manager, Hassan Elmasry, vigorously confronted management over About.com’s long-term prospects in a public battle that dragged down the Times’ share price.
This story first appeared in the August 10, 2012 issue of WWD. Subscribe Today.
Times executives strenuously defended the investment. Last year, then chief executive officer Janet Robinson, who had been a strong proponent of the purchase, said during an earnings call that, while revenue had declined, About was developing its “evergreen content” for “a growing base of digital users.”
But About, which makes most of its money through cost-per-click advertising, continued to experience losses after a reconfiguration of Google’s search algorithm cut into About’s once-sizable traffic. As a result, the Times took a $195 million write-down in July.
On Wednesday afternoon, the Times said in a press release that it was engaged in conversations to sell About, but that no agreement had been reached. The paper’s own report on the discussions identified the potential buyer as another reference site, Answers.com, for a price of $270 million.