MediaNews Group & The Hearst Corporation Acquire 80% of Kaango For $20 Million
Yesterday a 10-Q was filed with the SEC.Â The 10-Q was regarding MediaNews Group and The Hearst Corporation buying 80% of classifieds web site, Kaango.Â The cost of 80% ownership was roughly $20 million.Â
MediaNews Group is the fourth largest newspaper company and is headquartered in Denver, CO.Â MediaNews represents roughly 58 daily newspapers and 100 non-daily publications.Â Acquiring partial ownership of Kaango was a vertical integration strategy for MediaNews.Â MediaNews Group signed Kaango last June to provide their newspaper companies a classifieds platform.Â 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.Â Clearly the classifieds market on the Internet is still hot and is acquisition-ready.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry