CNN is in talks to potentially buy the social media news site Mashable, someone familiar with the negotiations tells TVNewser. The talks were first reported by Reuters’ Felix Salmon, who says that the deal could be worth north of $200 million:
There lots of caveats here. The talks are still ongoing, and may fall through, though they are characterized as serious.
A CNN purchase of Mashable makes sense on a few levels, but would also be rife with risk. We break it down after the jump.
Pros: As Salmon notes, both CNN and Mashable are consumer-centric, not business-centric. Both CNN.com and Mashable.com reach a wide variety of users. One could also argue that they reach different users, as Mashable is particularly strong in covering areas that CNN is less successful at.
By adding Mashable, CNN could potentially become even more of an online juggernaut than it already is. CNN.com is one of the most dominant online news sites there is, made even more impressive buy the fact that it does not have an online portal to help it. Mashable would only make it that much bigger and stronger.
Mashable is believed to be profitable, and if it is worth $200 million, it must be very profitable. If handled correctly, it could bolster CNN’s bottom line.
Cons: The key line in the last sentence is “if handled correctly.” Acquisitions like this are exceedingly difficult to carry out. Just look at another tech blog that was acquired by a large company, TechCrunch. TechCrunch founder Mike Arrington left, all of the top writers left, and the current site is a shadow of its former self.
The price seems steep. It is tough to gauge without knowing the financial details, but that is a lot of money to spend, especially when CNN acquired digital magazine Zite last year for around one-tenth of that price. Mashable may be worth it, but it might not be too.
How would it work? Would Mashable remain independent? Would it be folded into CNN.com (i.e. Mashable.cnn.com), what happens to the Mashable employees and the CNN employees that write about social media and technology? The details are sketchy, and if the integration does not work, it could spell trouble for CNN’s bottom line.