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Exclusive: Weblogs Inc Being Bought Out By America Online

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[by Rafat Ali] As usual, you read it here first: Weblogs Inc, the blog media company founded by Jason Calacanis (pictured at We Media conference today) and Brian Alvey, is being bought by America Online, has learned from multiple sources. The deal is done and should be announced this week…(Updated: it might be announced tomorrow AM now.)

Among the other companies Weblogs Inc talked to included the usual suspects: News Corp, Yahoo and MSN…

This is a very quick exit: the company was founded about two years ago, and took some money from Mark Cuban a year down the line. For Calacanis, this is his second company being sold in a space of about two years…his original company Rising Tide Studios was first sold to Wicks Business Information, which in itself was bought out by Dow Jones.

The company’s blogs have had an exponential trajectory, with sites like Engadget, Autoblog, BloggingBaby, and others. In total, the company has about 130 bloggers, with about 15 full time employees, from what I know.

AOL intends to keep the company/blogs separate from its site, much in the vein of what is happening with other blog and Web 2.0 companies being bought. But this is perhaps the first pure content-related company being bought out in the blog/ Web 2.0 space…or at least of this scale.

For AOL, this is head first into the blog media revolution, so to speak

Calacanis, who was at the We Media conference today where I was, refused comment; I did spot him with an AOL tote bag.

Staci adds: How much will Weblogs Inc. cost AOL? One estimate I heard today was roughly $20 million as an earn-out — to get it all, Weblogs Inc. would have to meet certain goals. But I’ve also heard talk of Flickr-like numbers, which would make it closer to $30-35 million range. Certainly to Weblogs’ execs advantage to have people thinking towards the higher end. Weblogs Inc. revenues are running at $1 million-plus annually from Google AdSense alone, according to numbers jubilantly released by Calacanis on his own blog; during a panel last week he said the company was bringing in $2 million a year. With that in mind, either of those numbers would be a generous multiple.
Not sure if the acquisition includes the proprietary software used to run it all. Blogsmith LLC was announced in August with Gordon Gould as CEO and Razor magazine as the first outside client but the url redirects to the Weblogs Inc. front page. (Update: an astute reader notes that Razor shuttered last month.)

Related: Our coverage of Weblogs Inc. over the last two years:

Weblogs Inc: The of Trade Blogs?

Dis*Content: A New Weblog Media Project In the Works

Enhanced Silicon: Venture Reporter Bought Out

Weblogs Inc Hires Editor in Chief and VP Marketing

Weblogs Inc. Makes Cameo Appearance At Google Analyst Day

The Business of Blogging

Weblogs Inc. Starts Global Expansion With Engadget Chinese