[credit provider=”SAY Media”]
SAY Media, the new company that was created last year when VideoEgg and Six Apart merged, is about to announce its first acquisition — a content site with an “active community” — with several more deals in the pipeline, according to the company.Since joining the two companies last year, SAY Media CEO Matt Sanchez has been working on a new model, which is to build a big media company by joining up dozens (and eventually hundreds) of smaller vertical sites, through acquisitions, investments, and partnerships.
We caught up with Sanchez recently at SAY Media’s New York office, where he explained the plan to us.
The idea is to provide these sites with capital, advertising revenue (VideoEgg is still an active ad network), a publishing platform (via huge updates to Six Apart’s TypePad product), traffic from the network, and other support.
By bundling many smaller sites — generally with teams of 15 people or less, with fewer than 5 million monthly readers — the idea will be to build strong communities and not dilute vertical-specific content or strong points of view by trying to make the sites too broad and mainstream. (One such site under development is a new women’s site from Jane Pratt — the founding editor of Sassy and Jane — set to launch next month.)
The benefits: This should increase the reach and inventory of the overall network, and funnels ad revenue back into the company, rather than having to split it with outside publishers. And if any of the sites ever becomes so big that it needs to stand on its own, SAY Media will have an equity stake — something that traditional ad networks don’t get from the sites their ads appear on.
To support this new plan, Sanchez tells us that SAY Media has grown to 350 employees in 9 offices worldwide, including about 180 in San Francisco and 65 in New York.
[credit provider=”Dan Frommer, Business Insider”]
The company is on pace to do over $100 million in revenue — largely because of VideoEgg’s legacy ad network business. And it’s planning to raise a big round of capital later this year to finance more acquisitions and investments.This consolidation structure makes sense, and isn’t exactly a new idea — in many ways, it’s similar to what’s going on at Jay Penske’s Mail.com media corporation, or even AOL’s blog network or Gawker Media.
Similarly, Federated Media, historically an ad network, has dabbled with acquisitions, including Foodbuzz last November. There will be other rollups. That could gradually make acquisitions pricier — good news for the content creators, but bad news for the acquirers.
But the model itself seems better than an ad network alone — especially if the new publishing platform removes a major pain point for the people making the content — so it’s worth a shot.