Yahoo buys its very own $100m content mine

We keep reading that content is king in the digital era and one-time search rival to Google Yahoo is betting $100m on just that with its acquisition of Associated Content.

AC was formed in 2004 by Luke Beatty and generates online content on a bewildering range of subjects from a huge network of very modestly-paid freelances. It claims to secure over 16 million unique users a month across a range of outlets including deals it has struck with Thomson Reuters, Hachette and USA Today.

The content, in particular the headline, is optimised to secure the most searches on the likes of Google, Microsoft’s Bing and Yahoo itself.

The company, headed by former Googler Patrick Keane, is controversial because it enables publishers and others to stuff their online outlets with cheap, bought-in material instead of paying ‘proper’ journalists and writers.

But Yahoo is doing a pretty good job of reinventing itself as an information provider rather than a search engine and AC’s content mine should provide it with loads more of the fluffy stuff it likes as well as opening up a new revenue stream.

Yahoo reported flat revenues of $1.59bn in the quarter to March but boosted profits from a poor $117.6m to $310.2m so it looks like the new strategy is rather more effective than competing head-on with the mighty Google in search.

The AC acquisition is a pretty clear sign of the way the company, which recently fought off a bid from Microsoft, sees its future.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.