Glaser: Why the NY Times Paid $410 Million for About.com's 500 Blogs

Mark Glaser interviews about.com CEO Peter Horan to find out why the NY Times paid $410 million for about.com's 500 blogs.

Says Horan: We have a million pieces of original content on our servers. What would it cost you to write a million articles? What would it cost you to hire the people to write the million articles, to drive traffic? Worldwide we get almost 40 million unique visitors a month. So how much marketing would you spend to get 40 million unique visitors per month?

...we have patents on the Guide system and a lot of the underlying technology. So we've spent eight years providing Guides with all the tools so they can publish. We have probably the industry's most sophisticated ad-serving system.

Neilsen/Netratings says about.com got 21,776,000 unique users in January 2005.

Blogging has the potential to save the Times from losing readers and advertisers. But if the Times follows the same set of editorial checks and balances it uses for print, the blogs will be ineffectual and slow and the money will have been wasted.

Already the Times has cut out the Circuits section and will be replacing it with a Style section. That could very well be because they can't keep up with blogs like Gizmodo and Endgadget, which move at the speed of light compared to the gray lady's sluggish pace.

Unless I just can't find the information anywhere else, I avoid About.com sites. Not that they don't have lots of good information, but they have excessively annoying pop-up ads and they won't let you navigate away from their site. Every link you click keeps you in their "frame." It's just a little too late 90s for me and I avoid it when possible.

that's also probably why they've been profitable. It's an 80s idea that content must be free.

At any rate, the Times is in a position to make changes. We'll have to wait and see if they get the blogosphere or not.

Apparently --about $410. per article? $10. per unique visitor ??? Lets wait and see their ROI on this investmnent! The Jury is out!
BVL

The big issue I have with a pricetag like that is quality. I think that About.com could be a much better site than it is today... Raising the bar in terms of their ad practices alone would improve the site by leaps and bounds.