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By MATTHEW KARNITSCHNIG
October 15, 2007; Page A14
Discovery Communications Inc., looking to jump-start a stalled Internet strategy, agreed to acquire the HowStuffWorks.com Web site for $250 million.
Discovery, owner of cable channels such as Discovery Channel and Animal Planet, said it will use the site as the cornerstone of an effort to bring its vast library of video content to the Web. HowStuffWorks.com is a closely held company whose owners include investor Carl Icahn. The purchase also includes a number of digital properties, such as a map database, owned by HowStuffWorks, which isn't yet profitable.
The deal, unveiled today, highlights how established media companies increasingly are expanding on the Web through targeted acquisitions instead of building their own sites, a strategy that largely has failed. Discovery's sites, which include online derivatives of its TV networks, have struggled to draw visitors.
"We're way behind in new media and digital," says Chief Executive David Zaslav, who has shaken up Discovery since taking over in January. "I don't think we win just by building vertically."
Acquiring HowStuffWorks will give Discovery the online firepower it has been lacking, Mr. Zaslav says. He wants to make the site, which draws about 3.8 million unique U.S. users a month, according to comScore Media Metrix, the foundation of Discovery's digital push. HowStuffWorks says it has 11 million users globally.
The deal is the biggest acquisition made by Discovery, a closely held company owned by John Malone's Discovery Holding Co. and Advance/Newhouse Communications. It is part of a bigger effort by Mr. Zaslav, a former executive of NBC, to refocus Discovery. Since taking over he has replaced much of its top management, closed its chain of retail stores and cut 20% of its work force.
Discovery initially plans to marry HowStuffWorks's text content with the network's more than 100,000 hours of documentary and other video footage. Discovery plans to incorporate HowStuffWorks in its future programming plans.
Founded in 1998 by Marshall Brain, a university professor in North Carolina, HowStuffWorks built its audience in part by focusing its content on topics that are often the subject of search queries on Google and other search engines. STORY
October 15, 2007; Page A14
Discovery Communications Inc., looking to jump-start a stalled Internet strategy, agreed to acquire the HowStuffWorks.com Web site for $250 million.
Discovery, owner of cable channels such as Discovery Channel and Animal Planet, said it will use the site as the cornerstone of an effort to bring its vast library of video content to the Web. HowStuffWorks.com is a closely held company whose owners include investor Carl Icahn. The purchase also includes a number of digital properties, such as a map database, owned by HowStuffWorks, which isn't yet profitable.
The deal, unveiled today, highlights how established media companies increasingly are expanding on the Web through targeted acquisitions instead of building their own sites, a strategy that largely has failed. Discovery's sites, which include online derivatives of its TV networks, have struggled to draw visitors.
"We're way behind in new media and digital," says Chief Executive David Zaslav, who has shaken up Discovery since taking over in January. "I don't think we win just by building vertically."
Acquiring HowStuffWorks will give Discovery the online firepower it has been lacking, Mr. Zaslav says. He wants to make the site, which draws about 3.8 million unique U.S. users a month, according to comScore Media Metrix, the foundation of Discovery's digital push. HowStuffWorks says it has 11 million users globally.
The deal is the biggest acquisition made by Discovery, a closely held company owned by John Malone's Discovery Holding Co. and Advance/Newhouse Communications. It is part of a bigger effort by Mr. Zaslav, a former executive of NBC, to refocus Discovery. Since taking over he has replaced much of its top management, closed its chain of retail stores and cut 20% of its work force.
Discovery initially plans to marry HowStuffWorks's text content with the network's more than 100,000 hours of documentary and other video footage. Discovery plans to incorporate HowStuffWorks in its future programming plans.
Founded in 1998 by Marshall Brain, a university professor in North Carolina, HowStuffWorks built its audience in part by focusing its content on topics that are often the subject of search queries on Google and other search engines. STORY
