Personalized magazine site Flipboard has acquired the news app Zite for Android and iOS as it tries to become the leading personal magazine across markets.
Aside from the purchase of Zite for $60 million, an amount that hasn’t been confirmed by both companies, Flipboard and CNN have also forged partnership that will allow the latter to expand its reach by tapping the potential of the former and by enhancing its sales strategy in the mobile niche.
According to CNN Digital’s senior vice president and general manager KC Estenson, tapping the expertise of Flipboard will allow the news organization to explore new money-making opportunities.
Meanwhile, Zite’s technology will help Flipboard to make mobile reading experience for its users more personalized and benefit from the CNN by tapping into its news content that it can provide readers.
The partnership between the two companies will also bring video reports and images from CNN to Flipboard. They also created three magazines on the platform from three popular programs of the network:
- GPS Daily by Fareed Zakari will cover global issues and tackle different issues from various perspectives.
- The Lead by Jake Tapper will provide an in-depth analysis of the latest news on politics, sports, money, and pop culture, among others.
- Go inside Politics by John King will feature the best stories from the best reporters of the CNN.
Flipboard makes its money through ads on republished content from well-known newspapers and magazines. The company shares the earnings from these ads to its partners.
CNN has around 80 million uniques on a monthly basis and isn’t afraid of losing any traffic since it has already been feeding content to the Zite app, and the latest move might even help boost readership.
While headlines across the Web mention $60 million dollars, the deal actually involved no exchange of money according to a source familiar with the private talks that tipped Bloomberg. This source also said that instead of payments, the equity stake and arrangements on content and advertising are considered.
Zite was acquired by Time Warner-owned CNN three years ago for $20 million. Since then, the team of Zite has grown bigger, redesigned the mobile app, and landed on Android and iOS.
It isn’t clear how large is the user base of Zite but its technology will be valuable in growing the 100-million user base of Flipboard. In the next few months, Flilboard will be integrating the curation algorithm of Zite into its offerings. Eventually, Zite will be absorbed and lose its own branding.
Mike McCue, CEO of Flipboard, revealed in an interview with TechCrunch that the advertisements are working well for his company. He disclosed that luxury brands such as Bottega Veneta and Gucci are buying their spots, and compared it to the attention Vogue is getting from advertisers.
When asked about Facebook’s Paper, McCue said that Flipboard doesn’t worry about the recently launched app of the social network. He claims that Paper seems to have been partly inspired by Flipboard but that it isn’t very broad or very deep. He also shared that downloads of Flipboard have had some surge since the roll out of Paper.