MediaNews Group & The Hearst Corporation Acquire 80% of Kaango For $20 Million

Yesterday a 10-Q was filed with the SEC.  The 10-Q was regarding MediaNews Group and The Hearst Corporation buying 80% of classifieds web site, Kaango.  The cost of 80% ownership was roughly $20 million. 

MediaNews Group is the fourth largest newspaper company and is headquartered in Denver, CO.  MediaNews represents roughly 58 daily newspapers and 100 non-daily publications.  Acquiring partial ownership of Kaango was a vertical integration strategy for MediaNews.  MediaNews Group signed Kaango last June to provide their newspaper companies a classifieds platform.  This is the same case for The Hearst Corporation who also previously signed Kaango for a classifieds platform deal as well.

“Kaango will be held by a newly formed LLC, which is 50 percent owned by each of the two. The remaining 20 percent of Kaango is owned by its founders and is subject to a call option and is expected to be purchased in the future, the company said,” wrote Rafat Ali [paidContent].

This transaction reminds me of when eBay Inc. bought 25% of classifieds website, Craigslist in 2004 from shareholder that was a former Craigslist employee.  Clearly the classifieds market on the Internet is still hot and is acquisition-ready.

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