Flipboard acquires rival Zite from CNN in deal that involves closer ties between the media outlets
There is really no barrier to creating new news aggregation app, as demonstrated by recent efforts by Google and Facebook. But Flipboard remains the most popular app among the many out there – along with Zite. Well, until now.
“Today marks an important milestone for Flipboard and its readers. By bringing the Zite team and technology to Flipboard, we can deliver an even more personalized experience to every Flipboard reader. By partnering with CNN we can provide the world-class news our audience expects and expand our global coverage in a significant way,” said Mike McCue, CEO of Flipboard in the acquisition announcement.
CNN will create new custom magazines for three of its programs on Flipboard: Fareed Zakaria’s GPS Daily, The Lead with Jake Tapper, and John King’s Inside Politics.
The announcement failed to mention if Zite would be shut down, but Flipboard did say that it would not update the Zite app. Zite CEO Mark Johnson will not be joining Flipboard but will take his winnings off the table while he is still ahead. (“I’ve decided to take some time off to think, hike, consult, travel, advise, meet, write, dream, read, study, and – probably most importantly – relax,” Johnson wrote on LinkedIn.)
As for the price of the deal, CNN first said that the deal was worth about $60 million, which would give it a bit of a profit over its original acquisition price. But later CNN backtracked on that valuation – apparently CNN is not a good source. (In reality, there was no cash exchange, as CNN got a stake in Flipboard in exchange for handing Zite over to Flipboard.)
The question one might ask is whether Flipboard can continue to acquire other aggregation apps as they appear and become popular. Also, one might wonder if competitors to CNN will want to work with Flipboard if they have a cozy relationship with the cable news channel. We’ll see.