Eight days ago, Techvibes editor Rob Lewis cited multiple anonymous sources in his prediction that CNN was preparing to acquire Vancouver startup Zite, an iPad smart magazine app.
The biggest story (and the one that was easiest to confirm with multiple independent sources) is that Vancouver's Zite is apparently in the process of being acquired by CNN for $20-25 Million.
Now it's official: CNN is indeed acquiring Zite.
“Zite represents the next generation of content discovery and personalized publishing and CNN wants to help lead in that space," says KC Estenson, general manager of CNN Digital. "We think we can advance the industry in a meaningful way that helps content creators grow their businesses while growing the distribution of a product that people already love. Zite’s technology can also be used to help CNN's Websites and apps serve more personalized content, making our current digital services even better.”
“Zite is thrilled about combining forces with CNN to create a world-class news discovery platform," says Mark Johnson, CEO of Zite. "In CNN, we have found a partner who shares our vision and passion. Being part of the CNN family gives us the capital to grow Zite's business and continue to innovate in the space.”
According to Zite:
Zite will continue to remain independent and the acquisition will not affect our algorithm-based selection policy.
Zite evolved from technology developed at UBC and the company has been a poster boy for government programs with grants from Canada’s National Research Council and PRECARN. In addition, Zite Founder Ali Davar has written guest blog posts on Techvibes in the past including one titled Running a Startup outside of the Valley.
Below is a letter from Mark Johnson announcing the news:
I am excited to announce that Zite has been acquired by CNN. We at Zite are thrilled about combining forces with CNN to create the world’s greatest news discovery platform. We recognize that, for a startup, an acquisition is both a moment of exciting validation and a time when lots of questions arise. In this letter I’ll give my own unvarnished perspective about why I’m excited about this milestone and why you should be too.
When Zite launched earlier this year, we were overwhelmed by the response. With over 100,000 downloads in the first week, incredible app usage and praise from users, it was clear Zite solved a basic problem: cutting through the clutter and personalizing information to users. When I became CEO of Zite, I was faced with a difficult choice: take venture capital and race to build Zite into a viable business or join forces with a large company and work with a larger pool of resources. Despite many attractive paths in both directions, Zite chose to be acquired by CNN. We found a partner who shares our vision and our passion for building an incredible discovery platform.
Why CNN? First of all, CNN has a history of innovation in the marketplace. CNN was the first organization to launch a 24-hour all-news network – embracing people’s love of news on their terms. Secondly, a modern news organization like CNN isn’t just about reporting. CNN.com is one of the largest web sites in the world and the CNN mobile applications boast well over 12 million downloads. CNN knows that they are competing not only in high-quality reporting, but in delivering you the best news possible. Finally, our interactions with CNN leadership, including KC Estenson, have made it clear that they are visionaries who are voraciously pursuing next-generation technologies to give CNN.com an edge over its competition.
Zite wants to assure our users that what you love most about Zite will continue to get better. I will continue to operate as the CEO of Zite and will report directly to KC. We will not promote CNN, Turner or Time Warner content in any special way: our agnostic personalization algorithms will be the sole determiner of what you see on Zite. Most importantly, Zite will now have the capital to grow. That means better recommendations, new innovations in our iPad interface and Zite on additional platforms.