The New York Times Co. has agreedto sell its troubled online information service, About.com, to rivalAnswers.com for $270 million, or two-thirds what the Times paid for it in 2005,according to a person familiar with the matter.
About.com provides information on a wide variety of topics and also operatesConsumerSearch.com and Calorie-Count.com. Content is written by paid expertsknown as guides. Answers.com, by contrast, relies on users to answer questions.
The Times purchased About.com for roughly $410 million. It has suffered in thepast year because of a change in the way Google handles search results. Thatchange made About.com content harder to find.
The sale was reported earlier by AllThingsD, a website affiliated with The WallStreet Journal. The Times company confirmed discussions of a sale but said nodefinitive agreement has been reached. The person who said there was a dealtold The Associated Press that it was still awaiting financing. As a result,the person was not authorized to speak publicly.
After the morning AllThingsD report came out, Times shares rose 49 cents, or6.1 percent, to close Wednesday at $8.57.
Answers.com's plans for About were not known. Messages left Wednesday withAnswers.com and its two major investors, Summit Partners and TA Associates,were not returned. Answers.com is based in St. Louis.
In the April-June quarter, the Times took a $126 million after-tax chargeagainst earnings to reflect the declining value of the About.com business. Thatpushed the Times to an overall loss.
In that quarter, revenue from About.com fell 9 percent from a year ago to $25.4million. Its adjusted operating profit fell 30 percent to $10.2 million. In2011, revenue fell 19 percent to $111 million.
Times Chairman and CEO Arthur Sulzberger Jr. said last month when the companyreported earnings that he was upbeat over About.com's prospects. "TheAbout Group continues to execute on its turnaround strategy, and we expect itto be on track to post continued meaningful improvement in the second half ofthe year," he said.