Hearst has finally succeeded in buying search marketing specialist iCrossing, we have confirmed with a source familiar with the matter. The company is paying $325 million plus earn-outs for iCrossing, which it has been in talks to acquire for more than six months now. Hearst had initially bid $250 million for the company late last year, but the interactive ad shop rejected that offer and put itself up for sale instead. Hearst — which has been trying to move beyond its traditional businesses — had been said to be close to completing the deal in mid-April after several other suitors balked at the price.
In an interview with the WSJ, which first reported the acquisition, Hearst CEO Frank Bennack Jr. describes the deal as a “further diversification of our lines of business.” Indeed, it sounds from the WSJ piece as though there will be only very limited overlap between iCrossing and other Hearst units, with iCrossing continuing to operate separately.
David adds: With this acquisition, Hearst has beat rival publisher Meredith (NYSE: MDP) in the race to add search ad services to its marketing arsenal. Search strategy is increasingly important to publishers and their advertisers, especially for cost-per-click advertising as part of larger marketing programs that Hearst would want to offer to its advertisers. Search could also aid Hearst’s social shopping site Kaboodle as well. But iCrossing is more than just search, in terms of what it can offer Hearst as it attempts to round out its marketing operations, including mobile, e-mail, social media campaigns, website development and display and rich media creation. So while search may be its strong suit, the combination of Hearst’s brand behind it could also mean a broadening of iCrossing’s offerings as well.