Yahoo Gives Up $100M for More Ad Bait aka Associated Content

"Associated Content stands as a cautionary tale for anyone looking to do news by the numbers. It is a wasteland of bad writing, uninformed commentary, and the sort of comically dull recitation of the news you'd get from a second grader." - Farhad Manjoo, Technical Writer, Slate
You may have heard that Yahoo agreed to buy the web-content company Associated Content (AC) for a price that many experts believe was close to $100 million. Associated has about 380,000 'contributors' who get paid between $0.99 - $10 per article they write and an additional performance bonus of about $2.00 per 1,000 views on their content.

Yahoo says that this acquisition will expand their source of high quality, original news and content. Quotes from Yahoo executives about the deal:

- "Combining our world-class editorial team with Associated Content's makes this a game-changer." - "Together we'll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network." - "The addition of Associated will enhance Yahoo!'s social, mobile local and media offerings and will entice advertisers with more topic areas and real-time content generation".

Frankly, I am perplexed by this deal. $100 million? I cannot see how this deal benefits the shareholders of Yahoo - not at that price. And given Yahoo's history of very bad acquisitions (Geocities,, Inktomi, Overture to name a few) my confidence level in the above statements by Yahoo execs is lukewarm.

So why is an HR marketing blog commenting on this acquisition? At HRmarketer, we take content very seriously. We produce a lot of content for our clients and we house a lot of content in our HR Directory and HR Content Library. We think producing great non promotional content (that is search optimized) is a key marketing and PR strategy for HR vendors. Content (white papers, research, articles, e-books, etc.) can be used to establish an HR vendor as a thought leader in the human resources marketplace, leading to increased online visibility and sales leads. But putting bad content out there just for the sake of generating leads almost always fails - fool me once shame on you; fool me twice shame on me.

Yahoo will have to sell a lot of ads to make this deal pay for itself. Currently AC makes money from the display ads on these articles and from Google AdSense. Will Yahoo now switch out those Google Ads and replace them with their own Yahoo Ads? And considering 80%+ of ACs traffic comes direct from Google search results how might that complicate matters?

I'm still not sure why this deal bothers me so much. Perhaps because such a value - premium - was placed not on the quality of the content but on a business model that flourishes because of its access to a ridiculously inexpensive yet willing labor pool that produces a product of questionable quality that - dare I say - the masses tolerate and even reward.

Or maybe I don't get it (an opposing view to my take is given by Ken Doctor, author of Newsonomics).

As one blogger wrote, "Associated Content pollutes the top search results with garbage content that is written solely for the purpose of search engine exposure in Google". And because contributors get paid for page views there really is no incentive to produce great content - just great headlines (to get you to click the links) with keyword stuffed articles and titles.

Isn't Yahoo concerned with how this content may impact the quality of their brand? Probably not as this is all about advertising revenue. But is it sustainable?

The Economist just last week published an outstanding article on these types of web sites which they call "content farms". Some excerpts from this article:

- "Content farms like Demand Media and Associated Content aim to produce content at a price so low that even meagre advertising revenue can support it". - "Demand Media’s approach is a “combination of science and art”, in the words of Steven Kydd, who is in charge of the firm’s content production. Clever software works out what internet users are interested in and how much advertising revenue a given topic can pull in. The results are sent to an army of 7,000 freelancers, each of whom must have a college degree, writing experience and a speciality. They artfully pen articles or produce video clips to fit headlines such as “How do I paint ceramic mugs?” and “Why am I so tired in winter?”

Predictably, many commentators are appalled, calling these sites “demonic”. Dan Gillmor, a professor of journalism at Arizona State University said "the problem with content farms is that they swamp the internet with mediocre content. To earn a decent living, freelancers have to work at a breakneck pace, which has an obvious impact on quality. Moreover, content that is designed to appear high up in the results produced by search engines could lose its audience if the search engines change their rules".

Time will tell if this deal pencils out but our suggestion to HR vendors is not to follow in Yahoo's footsteps by viewing content only as a means to generate more impressions and sales leads at the expense of brand integrity - and solid information.

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