AOL values distribution over creation

Sep 28, 2010

Tweet of the day comes from @pkafka, who just wrote:

If WSJ $30M TechCrunch # is correct, than AOL values company that doesn't own content 2x more than one that makes it.

Kafka, a media writer with All Things D, is referring to the fact that AOL today announced two acquisitions: TechCrunch (ubiquitous tech blog) and 5Min (syndication middleman for online video).

Pricing details for TechCrunch have not yet been disclosed, but estimates have ranged from $25 million to $40 million. Unclear if those estimates include earn-outs, which almost certainly are part of the deal. Expect a definitive figure when AOL next files with the SEC.<!-- more -->

AOL also didn't disclose pricing for New York-based 5Min, but a source close to the company pegs the price-tag at $65 million in cash. Decent return for the 5Min's VC backers, who plugged in $13.9 million over three rounds (including $400k seed deal).

But back to Kafka's point: TechCrunch makes things. Not just market-moving tech news, but also conferences that are among the industry's best. 5Min, on the other hand, collects third-party videos and distributes them to content-hungry websites.

So to my bosses at Fortune: Rather than producing original content, I'd like to interest you in some stuff that other people wrote. Can I have a raise?

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