The New York Times announced today that they’ve signed on the dotted line to purchase the five-year-old online product-recommendation consumer guide, The Wirecutter, founded by technology journalist and former Gizmodo and Wired editor, Brian Lam. The selling price was more than $30 million in an all-cash transaction that closed today.
“The New York Times is the perfect home for The Wirecutter because of our shared love and commitment to reader service and public good through rigorous reporting,” said Lam in a press release. “And most important, we're thrilled to have the chance to help Times readers find great gear that can improve their lives.”
Lam, who will stay on in an advisory role, founded The Wirecutter in 2011 and self-funded its growth. He created the site as a means to quickly and easily help consumers by providing pertinent buying advice and straightforward recommendations on quality items with lists that include the best in technology, gadgets, gear, home appliances and other consumer products.
“We’re very excited about this acquisition on two fronts. It’s an impressively run business with a very attractive revenue model and its success is built on the foundation of great, rigorously reported service journalism,” said Mark Thompson, president and CEO of The New York Times Company, in a written statement.
The Times will retain retention bonuses, as well as other payouts for the startup as a part of the deal. Also part of the acquisition is The Wirecutter’s sister site, The Sweethome. Both sites have a strong editorial backbone of journalists making research-driven, powerful product recommendations.
Money is made via direct links to merchants that generate revenue with each consumer click and purchase via e-commerce sites, such as major online retailers like Amazon, as well as niche and vertical-specific shops. The model is catching on with digital publishers as online advertising earnings continue a downward spiral. The Times saw a 7% decrease just last quarter with online ads.
“The New York Times is the definitive source for news, information and entertainment and now we’re working on becoming an authoritative destination for service journalism. The practical approach that The Wirecutter and The Sweethome take to product recommendations embodies the same standards and values that are the pillars of our own newsroom,” said Thompson. “Their service-focused guides align with our commitment to creating products that are an indispensable part of our readers lives.”
