Editors's Note: This article has been corrected to reflect that Discovery's Bruce Campbell referred to growth in Discovery's online segment, not overall growth. We apologize for any inconvenience.
At first blush, this acquisition sounded a bit weird to me. Discovery Holding includes The Discovery Channel, as well as TLC, Animal Planet, The Science Channel, and the other Discovery-related TV channels (Discovery Health, Discovery Times, etc.). HowStuffWorks is an Internet site that (obviously) tells people how stuff works.
Of course, basically, both cater to the curious. HowStuffWorks' entry for How Sharks Work already includes Discovery Channel video footage. (Come on, who doesn't love Shark Week?) That's an example of how Discovery's content may go hand in hand with HowStuffWorks.
Then again, it's not alone in the quest for knowledge. Many people sate their curiosity with user-generated Wikipedia, or maybe even New York Times'
Motley Fool Inside Value 's Philip Durell withdrew his recommendation of Discovery Holding last month, citing a lack of catalysts as one reason. Of course, this acquisition brings up interesting related points. (Let's not forget its plans for an ecocentric multiplatform initiative, Planet Green, for launch in early 2008.)
The deal's rumored to have a price tag of $250 million, although all the company disclosed was that operating cash flow impact will be "immaterial" in the first year. But is HowStuffWorks really HowDiscoveryBolstersGrowth? Discovery's Bruce Campbell described it as "our primary platform for growth" online, after all, and I can't help but wonder if that sounds a wee bit too ambitious. We'll have to see whether this will be a savvy growth driver for the company's online business, which is important in today's media landscape. Regardless, it's an interesting symbol of the continuing marriage of content between traditional formats and digital ones.
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