Can a news site be reborn? Gigaom readers are about to find out
For many, the name Gigaom may have already faded into the mists of time, like any number of other media startups that have failed to thrive and ultimately disappeared beneath the waves. After all, it shut down three months ago, and for a digital-news operation, three months is a lifetime. So it came as a surprise to some when a company called Knowingly announced that it has acquired all of Gigaom’s editorial assets and plans to re-launch the site in August under the same name.
Knowingly is run by a former Demand Media executive and Austin, Texas-based businessman named Byron Reese, who founded it last year. In a press release about the purchase that was posted at Gigaom, he says he is “excited to be a chapter of the Gigaom story” and looks forward to “continuing its mission of humanizing the impact of technology.”
Gigaom, which closed in March, was in business for eight years and built up a sizeable audience for its technology and business news, along with an events business and a subscription-based research product. But the company reportedly ran into cash-flow problems, in part because it raised as much as $10 million in debt (even though it was not profitable) and those creditors eventually helped trigger the shut-down.
In the interests of full disclosure, I worked at Gigaom for five years as a writer before I joined Fortune, but I was not involved in the business side of the company. If you want to read more about it, Peter Kafka at Re/code and Farhad Manjoo at the New York Times have both looked at the sequence of events that led to Gigaom’s demise.
Although the terms of the Knowingly purchase haven’t been made public, sources who looked into buying some or all of the assets said the initial price for the editorial part of the company was $6 million, but eventually that was reduced to $1 million, and still many bidders backed out—in part because the editorial staff had all been let go. That suggests Knowingly likely paid less than $1 million.
Reese said in an email that he isn’t talking about the deal or his plans for Gigaom at the moment, but a source with knowledge of the purchase said the Knowingly founder wants to monetize the existing content at the site by making the “evergreen” articles about popular topics easier to find, and then eventually intends to create more content of that nature—not news, but background and context about tech topics. Despite being dead for three months, the site still gets about 80,000 pageviews a day.
Such a strategy would fit with Reese’s background: Demand Media, a startup often referred to as a “content farm,” was essentially an SEO (search-engine optimization) play, which used targeted content on sites like its flagship eHow as a way to drive traffic. The site used algorithms to predict what articles would do well at what times—articles on how to change a snow tire in winter, for example—and as Chief Innovation Officer, Reese was instrumental in designing and implementing that approach.
The company became known as a content farm in part because it paid writers very little, and the content catered specifically to search engines rather than readers. After going public in 2011, Demand was hit by an update to Google’s indexing algorithms, which the company said was designed to weed out “low-quality” content.
According to its news release, Knowingly offers a number of online services, including one called iForetold—which allows people to post their predictions about the future—and a tool called Correctica that does copy-editing for websites. A former client of Correctica’s said it uses algorithms to predict what some of the most likely spelling and grammar mistakes are, and then uses that to find and correct them.
Reese also appears to have been the founder of a site called Santa Mail, which charged parents a fee to have a letter from Santa sent to their child (the site redirects to an eHow article), and his name appears on a patent for a kit that allows parents to simulate a visit from Santa. The Austin-based businessman has also written and published a book called “Infinite Progress: How the Internet and technology will end ignorance, disease, poverty, hunger and war.”