Yahoo Buys Online Content Factory for $90 Million

Yahoo has joined the race to mass-produce content for the web with its purchase Thursday of Associated Content for a rumored $90 million.

Associated Content, like Demand Media and AOL’s new Seed project, relies on thousands of freelancers to write and film how-tos, profiles and top-whatever lists for web publication — with help from search algorithms to determine what content should be created next. Associated Content has been able to attract brand-name advertisers to its site, especially for how-to articles like this one on choosing the right-sized hammer, which are surrounded by ads from Coldwell Banker and Fidelity.

“Combining our world-class editorial team with Associated Content’s makes this a game changer,” said Carol Bartz, Yahoo’s CEO. “Together, we’ll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo, and one of the reasons why we’re one of the most visited destinations online.”

Yahoo has long considered itself to be a provider of higher-end media, combining news and features written by its own staff with paid news feeds, and then adding curated links to other sites’ content. It’s not clear if Associated Content will be rolled into Yahoo’s site or if it will continue operating on its own, gaining page views and revenue through visitors stumbling on content through search. If not careful, Yahoo runs the risk of devaluing its brand and creating so much ad space that it can’t continue to charge premium rates to advertisers.

Associated Content has more than 16 million unique users per month, according to Comscore, and the editorial staff “reviews more than 50,000 pieces of content per month, including articles, images, audio and video,” according to the press release announcing the acquisition.

Associated Content considers itself to be a step above Demand Media, which gained much attention for its use of search logs to figure out what obscure topics users were looking for — but couldn’t find — and then creating cheap content to fill that hole. Yahoo says it will use its search engine to help identify topics that users and advertisers care about.

In announcing the purchase, Yahoo says it will expand Associated Content’s operation globally and will close the sale in the fall. It did not disclose the purchase price, but veteran Yahoo reporter Kara Swisher reported the company paid $90 million.

Photo: Yahoo in Times Square
Henrique Vicente
By Ryan Singel
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