Here we go again. Another major media company is considering wading into the treacherous waters of tech blogging: CNN, the cable news giant, is considering buying scrappy upstart social media blog Mashable for a whopping $200 million or more, according to reports from Reuters and the New York Times.
Reuters finance blogger Felix Salmon was the first to float the reported acquisition and astronomical valuation in a video dispatch from the South by Southwest festival in Austin, Texas, where numerous tech companies are set to announce new products and developments — making it a great platform for CNN to announce such a move.
“Is this true? I don’t know, but it’s entirely plausible,” Salmon said, outlining just what benefits CNN sees in Mashable — a seven year old tech blog founded in Scotland by then 19-year-old Pete Cashmore, still the company’s hard-partying and sex symbol CEO. Among those benefits include Mashable’s large and growing audience — some 20 million unique monthly readers — and the fact that it is a tech blog “for the masses,” as Salmon puts it, that is to say, a blog focused more on a casual audience.
New York Times media reporter Brian Stelter quickly followed-up with his own report saying that CNN and Mashable were indeed engaged in “advanced talks that may lead to an acquisition,” citing three unnamed sources. Stelter’s report didn’t put an exact figure on the acquisition, but pointed out that CNN in August 2011 acquired a social news aggregator app called “Zite” for an estimated $20 to $25 million, and that any potential Mashable acquisition would cost CNN much more.
Others have cast doubts on that figure, calling it way too high. But it is worth pointing out, as Forbes recently did, that Mashable is “almost as large as Huffpo was when AOL bought it for $315 million last year.”
As Forbes continued:
There is one key difference, though: Unlike Arianna Huffington, Cashmore never took on outside investors, even as Mashable’s workforce swelled from one to 40. So when the company has its inevitable Huffpo-like liquidity event — a scenario it’s said to be considering already — Cashmore’s personal payday figures to be substantially larger.
Indeed, it wouldn’t come as a surprise if CNN did acquire the blog, given that Cashmore has already been writing tech columns for CNN for the past three years. Mashable also has a content sharing deal with CNN.
Not to mention the fact that CNN has in the past few years attempted to incorporate social media — Mashable’s speciality — into its live TV broadcasts, with mixed results at best.
However, the rumor has apparently come as a surprise to many of Mashable’s staff of bloggers.
“I know even less than you do,” one source close to the staff told TPM, saying that many others were kept in the dark about it as well.
If the acquisition reports are accurate, CNN is treading delicate ground, too, given the way rival blog TechCrunch shed its marquee names (and traffic) after it was acquired by AOL for $30 million in September 2010. One of the first major names to go in that case was TechCrunch’s editor and creator, Michael Arrington. Many of the refugees of that unhappy merger have gone on to start their own competitor blog, PandoDaily.
Coincidentally, AOL and CNN’s parent company, Time Warner, completed a $350 billion merger, the largest to date, in 2000. It was later called “the worst deal of all time.” The companies disentangled and went their separate ways in 2010.
All of that is to say that recent history shows it is rarely an easy fit between more traditional media companies and Web properties. But of course, CNN should know this more than most.