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.
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. "When the talk got into the $30, $40 million range, AOL just kind of choked," a person "familiar with the discussion” told Peter Kafka.
Release below. More to come.
AOL TO ACQUIRE TECHCRUNCH NETWORK OF SITES
Leading Authority on Tech News Will Expand AOL's Growing Offering of World-Class, Audience-Relevant Content
San Francisco, CA, September 28, 2010 – AOL Inc. [NYSE: AOL] today announced that it has agreed to acquire TechCrunch, Inc., the company that owns and operates TechCrunch and its network of websites dedicated to technology news, information and analysis. TechCrunch and its associated properties and conferences will join the AOL Technology Network while retaining their editorial independence, further bolstering AOL's position as one of the world's leading providers of high-quality, tech-oriented content. The announcement will be made on stage at TechCrunch Disrupt in San Francisco, CA.
Founded by Michael Arrington, TechCrunch operates a global network of dedicated properties from Europe to Japan, as well as vertically-oriented websites, including MobileCrunch, CrunchGear, TechCrunchIT, GreenTech, TechCrunchTV and CrunchBase. The TechMeme Leaderboard ranks TechCrunch as the No. 1 source of breaking tech news online, followed by AOL's Engadget.*
"Michael and his colleagues have made the TechCrunch network a byword for breaking tech news and insight into the innovative world of start-ups, and their reputation for top-class journalism precisely matches AOL's commitment to delivering the expert content critical to this audience," said Tim Armstrong, Chairman and Chief Executive Officer of AOL. "TechCrunch and its team will be an outstanding addition to the high-quality content on the AOL Technology Network, which is now a must-buy for advertisers seeking to associate their brands with leading technology content and its audience."
Heather Harde, Chief Executive Officer of TechCrunch, said: "TechCrunch and AOL share a motivating passion for quality technology news and information, and we're delighted about becoming part of the AOL family. This represents a compelling opportunity to extend the TechCrunch brand while complementing the great work of sites like Engadget and Switched. Our contributors, and our audiences, can look to the future with excitement about what we can build when we have the significant resources of AOL behind us."
Michael Arrington, Founder and Co-Editor of TechCrunch, said: "Tim Armstrong and his team have an exciting vision for the future of AOL as a global leader in creating and delivering world-class content to consumers, be it through original content creation, partnerships or acquisitions. I look forward to working with everyone at AOL as we build on our reputation for independent tech journalism and continue to set the agenda for insight, reviews and collaborative discussion about the future of the technology industry."
TechCrunch also hosts industry-leading conferences and events, including The Disrupt series, The Crunchies Awards and various meet-ups worldwide. These conferences bring together industry innovators, entrepreneurs and financing sources to exchange ideas, forge new relationships and discuss the current and future industry trends.
"Engagement with thought leaders is as important to AOL as our engagement with our contributors, audiences, publishers and advertisers, and TechCrunch's conferences and websites will give us a promising, additional springboard to join and amplify these conversations. We're committed to quality in everything we do at AOL, and look forward to working with Heather, Michael and the TechCrunch team to extend the brand," said David Eun, President of AOL Media and Studios.
The AOL Technology Network consists of AOL's tech-oriented properties including Engadget, the Web magazine about everything new in gadgets and consumer electronics; Switched, which covers the intersection of the digital world with entertainment, sports, art, fashion and lifestyle; TUAW, the unofficial Apple weblog; and DownloadSquad, the weblog about downloadable software and other computer subjects. The AOL Technology Network ranks in the top five for tech news according to comScore Media Metrix, August 2010 data, and leads the top five in average time spent and average visits per user.
This acquisition will further AOL's strategy to become the global leader in sourcing, creating, producing and delivering high-quality, trusted, original content to consumers. TechCrunch will remain headquartered in San Francisco, CA, as a wholly owned AOL unit. Deal terms were not disclosed.