Rumors:
atnewyork.com
Is it 'About' Time For a Yahoo! Deal?
By Ryan Naraine
Could Yahoo! be on the verge of acquiring Silicon Alley content portal About.com or is another public relations ploy working its way through the rumor mill? Industry watchers suspect the deal-making murmurings may be the latter.
Contacted at his 42nd Street office this morning about recent buzz that Yahoo! was kicking his company's tires, About.com's (NASDAQ:BOUT) CEO Scott Kurnit had no comment.
When asked about rumblings that Yahoo! might be serious about hammering out an acquisition deal for all or part of About.com's 700-plus Websites, Kurnit said repeatedly: "We do not comment on potential transactions."
About.com already has a track record of other potential, "we're-making-a-deal" rumors in the past year, which is why the latest buzz has long-time Alley players rolling their eyes.
A year ago, potential deal rumors (not denied by the company) had CBS and USA Networks on the verge of a possible investment in or acquisition of About.com. Rumors of media companies eyeing About.com seem to enjoy a half-life in the Alley scene; Kurnit's seemingly non-denial of a denial today helps feed the speculation that a Yahoo! deal may be for real.
Strategically, however, it is not quite clear why Yahoo! would be interested in About.com, which basically duplicates the offerings of the giant portal. Additionally, About.com's market cap of $389.2 million is relatively solid compared to other Internet plays.
The company has quickly developed into an established media brand specializing in online targeted marketing. The more targeted the audience, the more appealing that audience is to businesses. Industry watchers say About's 700 topic-specific sites, which boast loyal communities of users, could be a feather in Yahoo!'s cap.
About.com has been on the acquisition binge itself, having bought four separate entities since June of 1999. For example, it bought VantageNet, which operates freepolls.com, a polling software which is running on the majority of the vertical sites on About's network.
In December 1999, it acquired North Sky, which operates freeservers.com and, in January this year, the company bought Expert Central, a site which offered one-on-one expert advice to About's users. In March 2000, Sombasa Media was acquired to match targeted content and commerce with the specific needs of About's customers.
The company, which styles itself as an "information and entertainment service", employs about 475 employees. It is expecting to post a third-quarter net loss of 18 cents per share when earnings are announced on October 23, much narrower than the $1.04 per share losses reported during the year-ago third quarter. In June of this year, its stock price was around $30. Since September, however, the price has been sliding and has been around $20 for the past few weeks. As of June 30th of this year, About.com reported $27.4 million in cash and equivalents on hand. |
