AOL is on the move.
On Tuesday, the faltering portal announced two major deals, each worth close to $50 million, and each part of the company's pronounced effort to bolster its original content offerings.
First, AOL announced that it had acquired 5min Media -- a company that bills itself as “the Web's largest video syndication platform” -- in a deal worth between $50 million and $65 million.
AOL then announced an agreement to acquire TechCrunch, the industry-leading blog covering Silicon Valley startups and attempted Silicon Alley turnarounds -- including its own. TechCrunch attracts about 2.3 million unique visitors per month, according to Compete.com.
That deal came Less than 24 hours after rumors swirled that the portal was close to buying the blog and conference business launched by Michael Arrington in 2005 [right]. The merger was announced onstage at TechCrunch’s Disrupt conference in San Francisco by Tim Armstrong, AOL’s chief executive. (Armstrong also confirmed the deal in a post on TechCrunch carrying the headline "We Got TechCrunch!")
Terms were not disclosed, though a source with knowledge of the agreement told TheWrap it was worth north of $50 million. (CNBC is reporting the deal is worth closer to $40 million, though, as Business Insider notes, the reported numbers may or may not include an earnout.)
In TechCrunch, AOL gets Arrington, an influential -- if divisive -- figure and voice in Silicon Valley. (Arrington said on Tuesday that, as part of the agreement, he will stay at TechCrunch for at least three years.) AOL also gets Crunchbase, TC's popular database of tech startups. RELATED: See Arrington's post, "Why We Sold TechCrunch to AOL."
Both moves are part of an original content push ushered in by Armstrong, following AOL's spin-off from Time Warner in December. In January, AOL bought StudioNow, another online video platform, for $36.5 million. (Also on Tuesday, AOL announced a third acquisition -- buying Thing Labs Inc., a company that produces social media software that AOL plans to integrate into its Lifestream social aggregator.)
In June, AOL announced an original content strategy that would include the hiring of "hundreds" of journalists. David Eun, president of AOL's media and studios division, told Ad Age: “We are going to be the largest net hirer of journalists in the world next year."
But the aggressive moves have yet to bear fruit financially. In August AOL posted a billion-dollar second quarter loss. The Web company’s revenue fell 26 percent to $584.1 million, which AOL attributed, in part, to a drop in advertising. (Overall, ad revenue fell 27 percent to $260.2 million.) The company also incurred a goodwill impairment charge of $1.4 billion related to the sale of its Bebo unit, the social network it offloaded during the quarter.
This isn’t the first time AOL has been close to nabbing TechCrunch. According to Media Memo, one pre-Armstrong-era deal fell apart when the price tag got too high.
