Microsoft and NBC’s MSNBC division announced today the acquisition of Newsvine, a citizen journalism and social news website that launched back in early 2006 (see our initial review). While never been witnessed to critical mass — at least to the extent of a Digg or Reddit, if you would call it that — the site has been taking off slowly since and is popular among its core base of users.
The acquisition is MSNBC’s first, and was all cash-based. While the terms weren’t disclosed, the original MSNBC article hints at the fact that “other social media sites have ranged as high as the $75 million that eBay was reported to have spent for StumbleUpon.com, which claims about 3? times the number of users as Newsvine.” Taking that into account, and this is a pure guess estimate, Newsvine’s valuation would come to around $20 million. Newsvine was founded by former Microsoft employees and is based in Seattle, Washington (not too far away from Redmond, where MSNBC’s headquarters are.) The startup has to date raised just a $1.5 million round from Second Avenue Partners.
MSNBC admits to be buying the ‘buzz’ and ‘technology’ behind Newsvine, expanding its aged old media-like offerings to include more user participation and citizen journalism into its business strategy. Newsvine on the other hand will be be able to leverage MSNBC’s high consumer-level traffic and expand its core user base of early adopters and geeks to, as it’s meant to, more regular citizens of the world. It’ll also be able to piggyback itself on MSNBC’s highly scalable datacenters, leaving plenty room for it to grow as various integrations occur with the MSNBC site.
One of the main ideas behind Newsvine is the fact that its core content itself is picked up from news sources like the Associated Press, at the top of which is a layer of user participation and citizen-based journalism. Having now teamed up with a major news source itself, it will be able to have a better handle on the type of content that gets to its site.
Unlike some of the previous old-school-meets-new-school acquistions that we have previously seen (one that instantly comes to mind: CBS-Last.fm), this is a match made in heaven for Web 2.0 acquisitions. MSNBC is aging in terms of being a very traditional news source, a focus it has carried since its launch in 1996. Having Newsvine as one of its properties would mean a lot of its user participatory concepts and technology will be integrated into the site, changing its direction to include more of a new media focus. For Newsvine, if it isn’t for the money and a nice exit, it’s the fact that it will finally be able to have the chance to expand its core base and have a lot of resources in hand to do it. A win-win for both parties? I think so.