Broadcasting giant CNN is rumoured to be close to buying social media news site Mashable for around $200m (£128m). Media commentators say such a link-up is a blueprint for the future of media.
Mashable, founded in 2005 by 26-year-old Aberdonian Pete Cashmore (pictured), covers and aggregates predominantly news about social media, focusing on companies ranging from start-ups to the big players, including Facebook and Twitter.
And although CNN refused to comment on the rumour – and Cashmore himself has denied that the company will be sold this week – speculation is rife that the deal is imminent, especially because the two parties are already very close, with the Scot writing a regular column for the Time Warner Inc-owned company.
If the rumour materialises into a deal, it would follow a spate of large, traditional media companies buying out or merging with smaller startups.
AOL bought popular technology news site TechCrunch for about $40m (£26m) in 2010, as well as gadget blog Engadget as part of a $25m (£16m) deal in 2005.
And last year, the same company acquired the news and lifestyle website Huffington Post for $315m (£201m).
CNN itself has also recently made moves in the social media market by buying Zite, a news application for the iPad, designed to give users a personalized magazine-like experience, last August.
This is a really positive development because it demonstrates amid all the Facebook frenzy that editorial content still has a value. Graham Lovelace
Media consultant Graham Lovelace said that the trend of traditional media giants investing in more cutting-edge, esoteric social media websites is a reflection of the desire to tap into younger audiences.
“Established media groups have a need to constantly replenish their brands as well as import new DNA into their businesses,” he told Channel 4 News.
“Acquisitions such as this are a fast-track way of doing that and extending reach, particularly in the younger, tech-savvy market which is so important for advertisers.”
And although “established firms that acquire entrepreneurial start-ups generally struggle to preserve what it is that makes those start-ups unique,” CNN would be investing in a brand that is currently capturing the tech zeitgeist in ways that traditional media outlets are not.
“At a stroke, CNN would gain one of the web’s hottest sites, with all the advertising revenues it generates,” Mr Lovelace said.
“Strategically, CNN would also benefit in two important ways. Mashable has built a massive following in social media, with 2.7m Twitter followers. That could be used to promote CNN’s broader content. But Mashable’s expertise in social is really deep and I can see CNN wanting to tap into all that knowledge for its own social media strategies, including social TV.”
Mashable’s methods could be injected into CNN to help them tell stories in new ways and reach audiences in the social media ecosystems they now inhabit. Robert Andrews
Robert Andrews, senior editor at paidContent, said that along with Mashable’s audience and reach, CNN will see Cashmore himself as a valuable asset.
“Not only is he a big name and the so-called ‘Brad Pitt of the blogosphere,’ but he also built his website from scratch. They will see that as a huge asset…and he would definitely be included in the purchase.
“The methods behind Mashable could be injected into CNN to help them tell stories in new ways and to reach very large audiences in the social media ecosystems they now inhabit… from both their perspectives [the deal] would bring tech news to the masses.”
Mr Lovelace added that a mooted deal of this size represents a huge confidence boost to the editorial content market.
“This is a really positive development because it demonstrates amid all the Facebook frenzy that editorial content still has a value.”