IAC Bags About.com from the N.Y Times for $300M Cash

Interactive/IAC has recently confirmed the news that it will acquire About.com from the New York Times for a price of $300 million in cash.

The companies are supposed to make the deal official either later tonight or tomorrow morning. The deal, however, is reported to close in next few weeks.

The acquisition will also include ConsumerSearch.com and CalorieCount.com.

As per some sources, Answers.com was also interested in buying About.com, but its offer was valued at $270 million, less than IAC’s offerings.

N.Y Times was reported to pay $410 million for the information portal in 2005, which the firm has sold at a discounted rate of $300 million.

According to Alexa, the provider of global metrics, About.com ranks at No. 37 in the U.S. in terms of traffic, and 80 worldwide.

In the last quarter, ad revenues of the site went down nearly 9 percent to $25 million; operating costs went up by some 15 percent to $15.2 million; and the site had an operating loss of $187 million. In its quarterly earnings in July, the NYT wrote down the value of About.com by $195 million.

As About.com was seeing a decline in traffic, the site got less fit for the NYT. But, it can prove to be good for IAC, which already owns various properties that also function on a similar business model.

IAC can be good for About.com as the former can pool its resources together to bring down some costs on the site. About.com can also be one more outlet for the advertising network that runs across the rest of the IAC range.… Read the rest

Read more

Facebook-Instagram Deal Cleared by FTC

The US Federal Trade Commission has given a go ahead to Facebook’s acquisition of Instagram, saying that it has no antitrust issues with the deal and will let it advance further.

Getting Facebook a step ahead in the deal, FTC said its commission held a unanimous voting of 5-0 to close the investigation and let the deal move on.

The news was brought forward in a press release by the commission.

Facebook seemed to be pleased by the FTC decision. The social networking site had bought Instagram for $1 billion in cash and company shares in April, a month before going public.

However, Facebook’s shares fell, which put the final deal today at $747 million.

Since photos are a key part of Facebook’s social network, it is believed that technology of Instagram would help the latter improve users’ mobile experience.

Following the announcement of acquisition, Facebook even released “Facebook Camera”, its own photo-sharing app.

Launched in 2010, the photo-sharing app, Instagram, has more than 80 million registered users. The app is also available for Android and iOS devices.

Mark Zuckerberg, Chief Executive, Facebook said in April that the firm had no plans on “doing many more of these” high-profile acquisitions of companies, which has a wide user base.

He also said that currently Instagram users could anticipate connecting with social networking service competitors such as Tumblr and Twitter. Zuckerberg also said that Facebook would not just try to integrate everything into the social networking site.

Instagram made some innovative integration into its Instargram 3.0., adding a geolocation feature, which indicates that the service is continuing to evolve.

The deal between the two companies has already been approved by the Office of Fair Trading in Britain.

Facebook hoped to close the deal in the second quarter of the year, but awaiting clearance, the firm told potential investors ahead of its May 18 initial public offering that it expects to finalize the transactions by the end of 2012.… Read the rest

Read more

Google Acquires Motorola for More Than Patent Reasons

The only reason that Google has listed out behind the acquisition of handset maker Motorola is that the purchase would “supercharge Android”. But it seems that the actual reasons were much more as compared to than just acquiring patents.

In a meeting, Google told analysts that Motorola’s actual property includes less than half of Google’s purchase price- $5.5 billion of the $12.4 billion.

Most of the companies, including Google are of the view that patents can act as a guard against any kind of legal attacks that may come from other big companies such as Apple. However, it seems that Motorola’s collection of mobile technology patents are not of much value to Schaumburg, the man behind the IL based phones. As a matter of fact, ever since the acquisition has taken place and cleared federal antitrust scrutiny, Motorola has added a loss of $233 million in operations and $1.25 billion in revenue.

But what comes as a surprise is that Google never discussed other reasons for buying Motorola, not even with analysts in the Mountain View, Calif. firm’s earnings. On the same, finance chief Patrick Pichette said, “Clearly, everybody should expect some changes at Motorola.”

Furthermore, Google also told federal regulators that Motorola’s invasion has helped them see a growth of $2.9 billion in cash, $2.6 billion from “synergies expected to arise from the acquisition,” $730 million from customer relationships, and $670 million from various other assets.

The actual worth of Motorola’s patent is valued more because it can safely lead Android devices from variety of legal threats. But the point is that whether Google will be able to provide this kind of security to all its allies.… Read the rest

Read more