Aol Buys TechCrunch, 5Min Media, and Thing Labs
It appears that it has been extremely busy the past few months in Aol’s Mergers & Acquisitions department. Today, Aol announced the acquisition of three companies – 5Min Media, TechCrunch, and Thing Labs. We recently reported that Aol has plans to succeed in 2011. These plans of course focus around their new business model of becoming the world’s leading content production company.
The acquisition of these three companies would appear to be just the beginning with more to come. If we take a look at these buys, you can see the focus on content. 5Min Media is the largest video content syndicator platform, which will allow Aol to not only syndicate their own video content, but that of others as well. TechCrunch is considered by many as the place for the latest breaking technology news and to learn about the latest tech startups. Thing Labs, the creator of Brizzly, will now be part of Aol’s Lifestream service.
Aol also owns several other popular blogs including Engadget, TUAW, and Joystiq among others part of the former Weblogs, Inc. network. While some may argue that the acquisition of TechCrunch (including their sister sites – CrunchGear, MobileCrunch, etc) is redundant to the already existing Aol properties, I disagree. The people who read TechCrunch are in completely different demographics than those who read Engadget.
I’m sure Aol is banking on the fact that they will have leverage to sell more expensive advertisements on TechCrunch properties due to their core audience (entrepreneurs, angel investors, venture capitalists, etc). Additionally, based on the information out there, it appears the terms of the deal require that Mike Arrington stick around for at least three years before running off, of course, with the hope he will be around for much longer.
There is no doubt that Mike’s voice is the loudest one on the site. After all, it’s (well, was) his site. When I previously discussed valuing a website, one of the key points I made revolved around the fact that if your site’s success is influenced by you being there, the value of the site is significantly decreased if you were to leave. Something Aol obviously considered.
While no details with regard to numbers have been provided, the speculation around the web seems to indicate TechCrunch sold for $25-40 million. What are your thoughts on these deals?