24 Hours later: What you need to know about CNN’s acquisition of Vancouver’s Zite
On August 22nd I wrote that popular iPad app Zite was on the verge of being acquired by CNN for $20-25 Million.
Yesterday Vancouver-based Zite confirmed the rumour and ironically CNN was the first US-based news outlet to cover the story. We beat them to it thanks to a heads up from Zite’s PR team.
24 hours later, Zite fans have some questions about the acquisition and here is what we now know:
Will Zite be absorbed into CNN?
Zite will be added to CNN’s portfolio of digital products as a separate, stand-alone business that will continue to innovate and provide users with the news and information they want. Zite will be a wholly owned subsidiary of CNN.
Will Zite’s Vancouver office be closing? Will Canadian staff relocate to the US?
Zite’s day-to-day operations will be run out of headquarters in San Francisco with CEO Mark Johnson reporting to CNN’s General Manager of Digital KC Estenson. Johnson – who has plenty of acquisiton experience – became CEO in April 2011.
Zite’s Vancouver office will become a R&D/Engineering office and Mike Klaas (second from right in photo) will continue to lead Zite’s technology R&D as CTO.
Founder Ali Davar (far right in photo) will stay on board as Executive Director.
Will Zite now give preference to news content produced by CNN?
According to responses on Twitter yesterday, Zite doesn not plan on changing their source-agnostic content policy and they have no intention of modifying Zite’s content discovery process, which will remain algorithm-based.
CNN’s parent company Time Warner participated in the cease & desist letter sent to Zite earlier this year. Could they be interested in just shutting down Zite?
CNN shares Zite’s vision of the future of discovery and the CNN team has assured Zite that they have no intention of killing the application. The problems associated with the cease & desist letter were solved very shortly after it was sent with Zite transferring all of the parties involved that wanted to out of reading mode into web mode.
Why did Zite go the acquisition route and not simply raise more money?
According to an interview with Business Insider yesterday, CEO Johnson liked the idea of working with a larger company that can bring expertise. “E-expertise. Technology expertise. Distribution expertise. We saw the combination of our technology, our platform, and our great product with their expertise and capital being a better than going at it ourselves.”
How much was Zite purchased for?
Techvibes stands by its original claim that Zite was acquired for $20-25 Million, however no one will confirm the amount and it has been called pure speculation.
Photo credit: The Globe and Mail
