Yahoo said it is purchasing Associated Content, aka the People’s Media Company™, in a deal reported by AdAge to be worth over $100 million

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Surprise pointed out that the deal comes as a surprise since the buzz around the company being a potential takeover target had died out in the previous months.

With this purchase, Yahoo is adding to its platform over 380,000 contributors who “have published over 2 million articles, videos, slideshows and audio clips that together have collected over 1.75 billion page views” since inception in “early” 2005, Associated Content said on its blog.

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In return, Associated Content will scale up to get global exposure through the deal as the platform so far was only U.S. focused.

Advertising Boon
Yahoo CEO, Carol Bartz, commented: “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.”

Indeed, the move is opening up huge avenues to marketers who will now be able to tap into targeted communities, already engaging on specific topics and representing passionate groups of customers. “Having insight into user intent through its leading search products enables Yahoo! to identify topics important to advertisers and users,” Yahoo said.

Yahoo’s Content Ambition
So, if Yahoo intends to harness Associated Content’s production to contribute to its existing flow… Shall we say it has clearly now become a content provider rather than a search engine? The company said itself that the buy “provides more opportunities for Yahoo! to partner and collaborate with publishers who can help the company shape the tremendous variety of content coming in, into something bespoke and even more engaging.”

So is Yahoo a search engine or content provider? What do you think?

The price tag for Yahoo’s effort to crowd source its content through this acquisition is now being re-evalued at $90-100 million instead of $100 million plus. Citing an unnamed source close to the situation, AllThingsD estimates $90 million in cash, whereas PaidContent gives a bracket of $80-90 million from an unidentified source “in the investment world”. In any case, the value of the deal and other details should be made available in the third quarter of this year, when the transaction will be completed.