Discovery Communications will announce today that it is buying HowStuffWorks.com for $250 million, the biggest purchase to date by the cable network company. What's interesting is that Discovery is paying the premium for the privately-held company not because it's picking up a highly profitable cash flow generator but because it's looking for a strategic way to come up to speed on web-based video delivery.
HowStuffWorks.com explains it this way:
Can anyone combine the best things about TV with the best things about the Web to create something new -- a sum that's greater than its parts?
That's what the fusion of Discovery Communications and HowStuffWorks is all about: A giant experiment -- one which we can all watch unfold. We are attempting to create a new media company for the 21st century
HowStuffWorks is planning to embed videos from Discovery's various channels as well as serve as an oulet for the display of new short-form videos that could very well turn into long-form series for Discovery's cable networks if they prove to be popular or sticky enough. This cross-fertilization between web and TV (or as HowStuffWorks puts it this marriage of "high-quality, credible, family-friendly, entertaining multimedia content both on television and the Web") is a hard act to pull off, particularly for Discovery, which, according to CEO David Zaslav, is "way behind in new media and digital."
The $250 million price tag seems steep for a site that counts only 3.8 million unique U.S. users per month and 11 million users globally. But, in addition to serving as a prime online outlet for Discovery videos as well as a farm team for the creation of new long-form TV series, Discovery is presumably buying the HowThingsWork for its expertise in all-things-Internet.
Cynthia Brumfield at 9:05 AM|Comments(0)
Blogs We Read
