May 27, 2015

Acquisitions: Better business through content

Content is a commodity that has driven more acquisitions than it's possible to count.

Content is a commodity that has driven more acquisitions than it's possible to count. In the early days of the digital revolution, building a line of devices or services was enough to keep large enterprises like Dell, Yahoo, AOL and others at the forefront of tech innovation. However, today many users look to companies for their insights and entertainment value. Whether it's viewing an amusing video, streaming a hit song or reading an interesting take on business news, acquisitions have put content front and center in the tech sphere. 

Take Yahoo's touchstone acquisition of Tumblr, for example. We've discussed the purchase on this blog before, but one of the most striking things about it is the fact that Yahoo was traditionally known as a search engine and email service provider. As the tech landscape diversified over the last decade, the pressure for Yahoo to compete and remain relevant caused CEO Marissa Meyer to seek new ways to position the company. Tumblr, a blogging platform, is a space to view anything from celebrity memes to personal essays. 

"We really think the richness and breadth of the content – even though it may not be as brand safe as on our site – is really exciting and that will help us reach more users," said Meyer to The Guardian in 2013. Meyer was responding to a question about the adult nature of some content hosted on Tumblr, specifically whether it would be at odds with the established Yahoo brand.

Finding a company with content that matches the material already associated with a brand can be tricky, but many large tech companies have successfully seized opportunities to absorb content hosts and creators into their portfolios.  

Even AOL, which began hosting news and entertainment content early in its creation, has expanded its offerings with acquisitions like those of The Huffington Post and TechCrunch. Delivering original content to subscribers, users and site visitors gives them a greater incentive to frequent AOL pages, adding value to the overall brand. 

So what are the benefits of a content-driven acquisition?

Growing web presence. One of the benefits of acquiring a company for its content is that it expands the number of pages, images, videos and other media that web surfers can encounter. Tumblr sports hundreds of millions of blogs and hundreds of billions of posts, so the sheer size and scope of such an acquisition has been good for Yahoo. 

Enhancing authority on subjects. More pages isn't the only key to better business through content. They also need to have original, credible and insightful things to say about the topics they address. A company like AOL didn't set out to employ high-end journalists, yet somehow that's where it's found itself in 2015. With The Huffington Post, AOL has a reputable journalistic brand under its umbrella whose resources are devoted to breaking stories, publishing commentary and growing its authority. 

Leveraging platforms for other purposes. Many content hosts come along with expertise and experience in communicating with targeted audiences. By absorbing those knowledge sets into operations for an established brand, that entity can find new promotion models that suit its expansion goals. 

If your business is looking for a new content mechanism or a larger company to lend your content expertise, a merger or acquisition could be the solution. With the guidance of an experienced M&A advisor, your company can pursue, negotiate and sign a deal that helps meet its growth objectives.