Guardian Buys Publisher of PaidContent Web Site - NYTimes.com

Guardian Buys Publisher of PaidContent Web Site - NYTimes.com: "Guardian Buys Publisher of PaidContent Web Site

Guardian Buys Publisher of PaidContent Web Site

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By BRIAN STELTER
Published: July 12, 2008

Rafat Ali created PaidContent, a blog about the business of new media, in 2002 as a kind of job résumé.
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“I was trying to get hired. I was trying to show employers the kind of journalism I could do,” Mr. Ali said. “I never thought it would be a business.”

Happily for Mr. Ali, no one offered him a job. On Friday, Guardian News and Media, the publisher of two British newspapers, purchased Mr. Ali’s homegrown media company, ContentNext, for a reported $30 million. The acquisition was the first time that Guardian had bought a business outside of Britain.

“It’s augmenting an area of our activity, media, in which we are already strong,” Tim Brooks, the managing director of Guardian News and Media, said.

Guardian News and Media, which publishes The Guardian and The Observer in Britain, is looking at the United States as expansion territory. It opened a bureau in Washington and created an American version of its home page last year. ContentNext will be run as a stand-alone unit within the company.

Mr. Ali started turning his PaidContent blog into a full-fledged company four years ago. Now based in Santa Monica, Calif., ContentNext publishes four specialty blogs covering the global digital and mobile content industries, with spinoff sites for India and Britain. The blogs stand out for their original reporting by a team of 14 journalists.

ContentNext also sponsors seminars and conferences and produces research reports. The company was attractive to Guardian because of its multiple revenue streams, which also include online advertising and job listings.

ContentNext is backed by Greycroft Partners, the venture capital firm run by the longtime media investor Alan Patricof. The company recently hired the media veteran Nathan Richardson as its chief executive.

Several media Web sites have been acquisition targets in the last year. The news and networking site Mediabistro.com was sold to the Jupitermedia Corporation for $23 million last July. The computer news site Ars Technica was acquired by Condé Nast for $25 million in May.

Mr. Brooks and Mr. Ali would not comment on the financial terms, but the Web site AllThingsD, operated by Dow Jones, reported the price to be “north of $30 million.”

The deal came together after Mr. Ali approached Guardian looking for second-round venture capital. “We turned around and said ‘we’re not venture capitalists, but we’d love to buy your business,’ ” Mr. Brooks said.