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Yahoo (NSDQ: YHOO) is buying Associated Content for a price we’re hearing is between $90 million and $100 million reported $100 million-plus…

Yahoo Associated Content

Yahoo (NSDQ: YHOO) is buying Associated Content for a price we’re hearing is between $90 million and $100 million reported $100 million-plus in an effort to boost the amount of content it has across its sites. Associated Content pays contributors who produce photos, text or videos on any subject and then makes money by selling ads around it — and Yahoo says the acquisition will let it expand into “more topic areas and real-time content generation.” Associated Content has more than 380,000 contributors — primarily in the U.S. — and Yahoo says it will now push the platform abroad as well. It will be able to base assignments in part on what users are searching for on its site.

The deal comes as another mass content company, Demand Media, is reportedly preparing for a mega-bucks IPO. While both Demand Media and Associated Content have been frequently mentioned as possible acquisition targets, talk had died down in recent months and the Yahoo deal caught industry players by surprise.

Associated Content was founded four years ago and had raised more than $21 million in funding from investors including SoftBank Capital, Canaan Partners and AOL (NYSE: AOL) CEO Tim Armstrong. Armstrong, who owns roughly 20 percent, backed the company when he was working at Google (NSDQ: GOOG) but was allowed to keep his holdings in Associated Content when he moved on. At AOL, Armstrong has started his own Associated Content-like content initiative, Seed.com.

Associated Content syndicates its content to sites across the web and it seems as though at least for now those deals will stand, with the company saying in a Q&A about the deal that it will continue to operate “as is” — albeit with the introduction of new staff to build it out and the Yahoo sites as content destinations.

No financial details are being released. AdAge pegs the price at more than $100 million.

Staci adds: Kara reported $90 million at AllThingsD, following an interview with Yahoo and AC execs. A source close to the situation told Rafat it was more like $90 million to $100 million — and a source of mine in the investment world says the assumption making the rounds is $80 million-$90 million. (No idea why Yahoo feels compelled to play coy with the price. It’s a public company making a high-profile acquisition; it shouldn’t matter whether or not it has to be reported.)

However you look at it, it’s a decent exit for investors and — if it managed right, a not-unreasonable price for Yahoo to get an instant presence in what could be a lucrative market. This is no Bebo. Or, as one insider I spoke to today put it, “I’m not going to say it will look like a bargain, but it could look like a smart deal.”

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SUNNYVALE, Calif., May 18, 2010 (BUSINESS WIRE) — Yahoo! Inc. today announced it has signed a definitive agreement to acquire Associated Content Inc. This strategic move extends Yahoo’s ability to provide high quality, personally relevant content for the benefit of more than 600 million users as well as tens of thousands of advertisers. As Yahoo! enhances its social, mobile, local, and media offerings, the acquisition of Associated Content reinforces the company’s longstanding promise to offer the best of the Web — by combining Associated Content’s approximately 380,000 contributors who provide rich and varied content on a broad array of passion points, with Yahoo’s leadership in partnering with established content brands and the award-winning team of editors and experts from Yahoo!.

“Combining our world-class editorial team with Associated Content’s makes this a game-changer,” said Carol Bartz, CEO, Yahoo! Inc. “Together, we’ll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we’re one of the most visited destinations online.”

“The Associated Content team and our 380,000 contributors are looking forward to joining Yahoo! and to the opportunities that being part of a global Internet brand presents,” said Luke Beatty, Associated Content founder and president. “Combining our crowd sourced content with Yahoo!’s distribution, world class editorial team and online marketing leadership will accelerate our growth as we continue to leverage our best-of-breed platform to deliver high quality compelling content on more than 60,000 topics.”

For advertisers, this deal will expand Yahoo! into more topic areas and real-time content generation. The combination promises to offer advertisers even more opportunities to engage groups of passionate consumers in ways they will find uniquely appealing to their interests and tastes. Having insight into user intent through its leading search products enables Yahoo! to identify topics important to advertisers and users. Yahoo! plans to use Associated Content to create content around those topics and leverage Associated Content to contribute content to existing media properties. Associated Content also provides more opportunities for Yahoo! to partner and collaborate with publishers who can help the company shape the tremendous variety of content coming in, into something bespoke and even more engaging.

While current Associated Content content is U.S.-centric, Yahoo! expects to scale the platform globally.

Associated Content was founded by Luke Beatty in Denver, Colorado, in 2004. Associated Content receives more than 16 million unique users per month (comScore) and the editorial staff reviews more than 50,000 pieces of content per month, including articles, images, audio and video.

Yahoo! expects to complete this acquisition in the third quarter of 2010. Financial terms were not disclosed.

  1. You are not a fool to ask for a big price but you are a fool to pay for one.

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