As rumored a week ago, CNN has purchased Zite, the makers of a personalized iPad magazine application that aggregated content around user preferences and social-media feeds. Terms of the deal were not disclosed, but CNN said it planned to operate the company as “a separate, stand-alone business” in announcing the deal.
Zite got off to a bit of a rocky start with its iPad app, which angered a few publishers by displaying their stories in an ads-free reader window that was a nice experience for the reader, but of course blocked those ads. But after several conversations with publishers CEO Mark Johnson appeared to smooth the waters, allowing Zite to grow during 2011. CNN plans to use some of Zite’s technology–which is based in part around search algorithms that discover content with cues from the reader–in its own applications and Web sites, CNN’s KC Estenson, general manager of CNN Digital, said in the blog post announcing the deal.
Later in an interview, Estenson said that CNN is looking at around an 18-month time frame in which CNN will help Zite scale its infrastructure to handle a much bigger audience while Zite helps CNN improve the quality and quantity of personalized content that it offers through its mobile products. Zite isn’t going anywhere, but you can probably expect to see it featured on CNN’s pages, he said.
Neither Estenson nor Johnson were willing to talk numbers: Zite announced earlier this year that 125,000 people had downloaded the application, but the two refused to provide an update on that number. They did say that usage of Zite’s app–as in, the number of people who downloaded it and are still actively using it–is very high. Likewise, they declined to get into specifics about plans for the future but Estenson said that Zite will “start to spread out across more platforms and more territories,” implying that an Android version might be in the works.
The company will continue to have a West Coast presence, with Johnson staying on to run Zite and Mike Klass to serve as chief technology officer for the subsidiary. Ali Davar, who founded the company, will become executive director, CNN said. AllThingsD reported the value of the deal as between $20 million and $25 million, but neither CNN nor Zite would confirm that number.
In a blog post, Johnson promised that Zite wouldn’t suddenly turn into a CNN or Time Warner (NYSE: TWX) mouthpiece. “We will not promote CNN, Turner or Time Warner content in any special way: our agnostic personalization algorithms will be the sole determiner of what you see on Zite,” he wrote.