Yahoo took its biggest step yet to keep pace with Google, Facebook and other online giants getting into the news business when the company announced May 18 it would acquire content aggregator Associated Content for a reported $100 million.
What does the deal mean for the lowly writers producing all that content Yahoo found so attractive? We’ll get to that. First some background.
With AOL investing in Seed and Patch, Demand Studios reportedly contemplating an initial public stock offering and Google and Facebook aiming for world news domination, the acquisition is Yahoo’s attempt to put a stake in the ground in the local news and content aggregator business.
Yahoo’s has been on a hiring spree lately, snapping up experienced newspaper editors and reporters to build up its news division. Last November, Yahoo hired Dallas Morning News new media strategy chief Anthony Moor to head its local news effort, which should have been a sign the company had bigger plans in store.
Yahoo’s stepping into territory that’s seen a flurry of activity from national networks like Seed and Patch and Examiner.com to smaller, home-grown hyperlocal news ventures.
According to a Yahoo press release on the deal, Yahoo will use Associated Content material for the kind of local news its in-house staff doesn’t produce. And according to an Associated Press report on the deal, once the acquisition’s done, the Associated Content website will go away and Yahoo will fold content produced by the aggregator’s freelance contributors into its own news offering.
That’s putting a lot of responsibility on the shoulders of Associated Content contributors, which the company says numbers 380,000. Sidetrack: 380,000 contributors, really? That’s the number both companies quoted in their press releases. But I can’t help but think that’s the total number of people who’ve ever written for the site; it’d be interesting to find out how many of those write for the site on a regular basis; I’d wager it’s a much smaller number.
In the immediate wake of the announcement, freelance writers weren’t sure what to make of the news.
No doubt web content writers who work for Associated Content are pleased. In an FAQ on the deal Associated Content put on its site immediate after the announcement, the company said writers would be able to contribute to a number of Yahoo-run media properties. Curiously, when I went to double check the the FAQ today the wording of that part of the release had been changed to be sightly vaguer, saying only: “With Yahoo!’s wind beneath Associated Content’s wings, contributors can expect new assignments, new ways to profit form their content and improved marketing tools.” One thing’s clear, come Q3 when the deal’s expected to close, contributors’ paychecks will be coming from a much bigger bank account.
Immediately after the deal was announced, writers turned to Twitter and private message boards to express their sentiments. “I hope this results in something better rather than something worse,” one posted on a freelance message board.
Others were more skeptical. “Unless they plan to pay a living wage, I think the (Associated Content) purchase is a bad step,” said New York writer Devon Ellington.
What my take on the deal? A couple thoughts:
- If Associated Content is hooking up with Yahoo it could be a sign the company needed deeper pockets than what were available to it as a stand-alone entity to continue building out its business plan.
- The deal’s about advertising pure and simple. Local content gives Yahoo access to local advertising that would otherwise go to those hyperlocal news ventures that have been cropping up everywhere.
- If Associated Content was attractive enough for Yahoo to spend $100 million on, you can be sure other content sites are taking notice. I wouldn’t be surprised to see a Helium or HubSpot shopping for their own sugar daddies in the not too distant future.
- Acquistions make people rich. Unfortunately it’s never writers. Lawyers, advisors, matchmakers, venture capital investors – they’ll all get handsome cuts of this deal. If they’re lucky, Associated Contents writers may end up getting a few dollars more per article due to the big bump in traffic that will happen when their work starts showing up on a combined Yahoo-AC site, which the companies say will average 600 million unique visitors a month.
What about you – what’s your take on Yahoo’s deal to buy Associated Content? Do you write for either one? If you do, are you expecting significant changes?
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Yahoo doesn’t seem relevant now, and hasn’t for a few years, so the main benefit of the AC purchase is getting them some attention. Not all of the big investors know about the mills yet, I don’t think, so they might be willing to put millions into a site if they think they can get a $100 article for $1. AFAIK Demand Studios rejected Yahoo’s offer to purchase them.
Stopped writing at AC since they’re offering $2-$3 upfront now, along with partial revenue share, and it’s full of respun articles and other poorly written articles, but AC is a domain that has been up for a long time and has a lot of page views, so it is an authority site in Google.
Best candidate for an acquisition, IMO, is Examiner.com. Like the other mills it doesn’t pay much from what I hear, but it seems to be treated like an actual newspaper by other authoritative sources. Not sure what the editors are like there. And it is a good source for hyperlocal advertising, that’s a good point.
This move might encourage the formation of new content mills. There are several others that formed, and they are attractive to overseas writers. The IRS seems to be pushing tax regulations, possibly related to health care reform, that require all these companies to send out W9s which gets rid of scammers, and it also makes it more difficult to outsource to other countries since the contractor has to fill out a US tax form.
Didn’t hear that about Demand rejecting Yahoo’s offer, but they’ve raised a substantial amount of venture funding, so probably don’t need to partner up with a larger company like a smaller start up would. Examiner.com is backed by deep pockets, billionaire industrialist Philip Anschutz’s Denver-based Clarity Media Group – so unless he’s suddenly become uninterested in the local news business, I don’t peg them as an acquisition candidate, unlike some of the other venture-based content sites.
I hadn’t thought of the implications of health-care reform on content sites that draw from a large number of contributors: seems like the administrative burden of using all those contract workers would be enough to keep some wannabes out of the arena.
Michelle
With so much emphasis here on “local content,” I have to wonder what’s going to happen (if anything) to all of the AC writers producing evergreen material, and how Yahoo! plans to use that if it plans to at all.
And will a company still significantly involved in search start ensuring better quality if they’re expanding their role as content producers, or is this just another way for a content farm / mill to get more exposure over authoritative sources?
This is a big step backwards for Yahoo! in my opinion. They had a chance to step up in the search department while Google keeps catering to mills and other major MFA sites while punishing independent producers for similar things. They could have become the one major search outlet really focusing on relevancy and top notch results. Instead they’re dipping more than their toe into that very MFA market. Personally, I’m pretty disappointed. Well, I guess there’s always still hope for Bing — never thought I’d be cheering on Microsoft!
Appreciate your insights on this Jenn.
Michelle R.
[...] then I read this very good article by Michelle Rafter, whose blog focuses on freelancing in the digital age. In it, she points out [...]
I haven’t written anything new for AC in a while, because the low pay doesn’t seem worth the effort. I do, however, still get page view money from them each month, and it will be interesting to see if that amount changes at all as AC integrates with Yahoo.
Once the deal’s done check in here again Kathleen and give us an update.
Michelle
Nice article Michelle.
I’m struck by the interest in the content mills and the inherent tension between the writers and the publishers posting full-text articles. I guess the market will set the price and writers can choose to write or not.
At Outside.in, we’ve been focused on aggregating and distributing headlines and links — not full text — so that the larger publishers can create local inventory on their pages but drive traffic (and eventually ad revenue) to the hyperlocal writers, without whom there would be no content.
We’re driving millions of clicks now for free to local publishers from across our network of publishers (and growing since we went live on CNN.com).
Seems to me that you can either own the content and try to drive the cost (and quality?) down or try to add value to the ecosystem by (at least) organizing eyeballs and driving traffic to the folks who are writing the content.
We’re betting on an ecosystem that lets everyone add value and get some equal or greater value in return.
You’re right that writers are choosing to write for content mills or not. Ever since I started writing about content sites last year, there’s been a running debate on this blog and elsewhere whether it’s worth it to work for aggregators, mills, farms – whatever you want to call them. Some writers have turned content work into a steady source of income. Others have been turned off by the lack of quality control. Still others – myself included – have no interest in making that type of work part of our business plan. Frankly, since the beginning of the year I’ve had so much going on I’m turning away assignments (knock on wood) so that type of writing, even if it is quick turnaround stuff, doesn’t appeal to me.
I was unfamiliar with Outside.in’s business model, so thanks for bringing it to my attention. My guess is we’ll continue to see different flavors of content sites and hyperlocal sites pop up over the coming months, especially if venture investors and big online media companies are waking up to the investment opportunities. I’ll continue to write about these – in fact, I’m running a Q&A next week with the founders of an interesting new hyperlocal startup. Stay tuned.
Michelle
The fact is that it’s all said and done, and the writers at AC are now in shock because they did not see it coming. There are some talented people at AC, and the ones who have always been cheerleaders will always have a place there. Personally, as an ex-AC writer who left because I didn’t want my writing associated with the spun and poorly written articles that permeated the site, what I see is that Yahoo will take what they want, and leave the poorer stuff on AC. Eventually, AC will fold because nobody will be reading it anymore, or Yahoo will close it. It took Demand 4 years to close eHow, and still, they did not see it coming.
There is an ex AC writer who has some good insight into this. She was telling people on eHow months beforehand that they were going to be pushed out, and now she’s saying the same thing about this acquisition. Even one of AC’s favorite sons, Randy Barefoot, admits that his type of articles are probably going to be gone.
Particularly interesting is her last post about the “Union” forming on Facebook.
http://bit.ly/ca1ZIT
I use a pen name for the few articles that I have written for AC. The pay is crazy low, but not any lower than Examiner. I am consistently trying to move away from these types of sites to my own clients and hope to do that by the end of the year.
I’m not sure what this acquisition will mean for writers, but those who have just had the big eHow shock are going to be naturally skeptical.
what do we do when AC owes us money?
1 yr, no payments?
Good question, not sure how much I can help. Have you tried contacting their accounts payables department? If so, what have they said? If you’re a member of ASJA or other freelance organization, you can contact their grievance committee for help. Or you could look into filing a claim in small claims court. Good luck, let me know what happens.
Michelle