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Yahoo Buys Associated Content

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Low-cost content just got a hefty endorsement.

Yahoo has reached an agreement to acquire Associated Content, the six-year-old company that produces thousands of search-friendly articles written by freelancers on a wide variety of general interest topics. Terms of the deal were not disclosed.

According to Yahoo, Associated Content manages a team of 380,000 contributors who produce content ranging from "How to Eliminate Odors From Curtains" and "Tips for Selling Your Collectibles Online" to topical stories on sports, finance and news. The content lives on AssociatedContent.com and on multiple partners' sites, including digital properties managed by companies like Turner, Fox and Scripps.

Dubbed "The People's Media Company," Associated solicits contributions on its site, promising writers that they can "get published, reach millions [and] get paid." Per Quantcast, the company reaches 17.5 million unique users.

Yahoo, which has recently been hiring more journalists as it attempts to build out a distinctive voice for channels like Yahoo News, views Associated Content as complementing its own content offerings, allowing it to dig deeper into certain verticals.

"This is the next phase for our content biz at Yahoo," said Jimmy Pitaro, vp, Yahoo Media. "You will be taking the most powerful media sites in the world and extending those sites' offerings to niche content . . . that in the past we haven't been able to scale."

For example, Pitaro said that Yahoo Sports has previously had light coverage of soccer and lacrosse, which Associated contributors can now help bolster. The company plans to spread content from Associated on Yahoo Sports, Finance, News, Entertainment and various lifestyle sites. "Across each media vertical we will identify holes," said Pitaro.

Yahoo also plans to use Associated Content to produce articles as needed, based on what its users indicate they are interested in according to the portal's vast streams of Web surfing and search data. In addition, Associated Content's collection of writers will provide a major boost to Yahoo's efforts in local media. "In my mind, the difference maker will be the combination of Yahoo and Associated Content," said Pitaro. "[That will create] the most powerful content offering online today."

The move by Yahoo comes just weeks after its top sales executive Joanne Bradford surprised the company by jumping to Associated Content's top rival, Demand Media, to become chief revenue officer. Recently, several other Yahoo executives, including former vp of brand packaging Erika Nardini, reportedly followed Bradford to Demand. Yahoo had previously been rumored to be exploring an acquisition of Demand.

Associated Content provides Yahoo with an answer to Demand, as well as AOL's similar and much publicized content project, Seed.com. In March, AOL unleashed hundreds of freelance reporters at the South by Southwest Music and Media Conference and Festival as an experiment in large-scale, low-cost content production. Yahoo CEO Carol Bartz has cited AOL of late as Yahoo's closest rival over Google.

Companies like Associated Content, Demand and Seed have raised fears among many that they are contributing to either a decline in quality or the deterioration of business in the journalism world. "That actually was a concern when we first went into this," said Pitaro. However, after further examination, Pitaro said his team was impressed with the quality of Associated Content's work. And the company has the proven ability to drive traffic and attract top advertisers. (Associated Content has run campaigns for Chevrolet and AT&T.)

One of its strengths has been producing custom content for brands, something Yahoo plans to exploit. Pitaro said that Associated Content's stable of contributors would enable it to produce far more branded entertainment vehicles than it is capable of currently.

"This will be a much more scalable approach," he said. "Now, for us to invest in branded entertainment, it's got to be a large program. What we can do now is partner with many more advertisers at lower cost."