America Online to Buy Weblogs for $25 Million
Time Warner Inc.’s America Online unit said Thursday that it was buying Weblogs Inc., a Santa Monica-based provider of popular online journals.
AOL is paying $25 million in cash for privately held Weblogs, an executive familiar with the deal said.
Weblogs Chief Executive Jason McCabe Calacanis, who co-founded the firm in 2003, said it now operated 90 blog sites that typically focused on specific topics. The two most popular are Engadget on tech gadgets and Autoblog on cars, each of which gets as many as 1 million visitors a day, he said.
AOL, with nearly 27 million subscribers and about 20,000 employees worldwide, plans to add links to Weblogs’ sites to its online service and other online properties.
“From our perspective, it’s a way for us to attract more visitors to our service,” said Jim Bankoff, AOL’s head of programming and products.
“We are always looking for what might become a real mass market phenomenon,” Bankoff added.
The purchase marks the third acquisition in recent months for AOL after it restructured its business to focus on boosting advertising revenue to offset a declining dial-up customer base. Over the summer, AOL made more of its once-proprietary services available free on its website, including music videos and e-mail.
In July more viewers watched the Live 8 concerts on AOL than on television in the U.S. AOL hired Weblogs’ music bloggers to act as live Web reporters at the global event, Calacanis told Reuters.
Calacanis said promotion by AOL would bring far more visitors to Weblogs’ sites. “It can move us from a niche audience to a mainstream audience,” he said.
On Thursday, Time Warner shares fell 8 cents to $17.92.
