Magazine publisher snags About.com for $690 million

In the latest marriage of old and new media, magazine publisher Primedia said Monday that it will acquire Web directory About.com for $690 million in stock.

With the agreement, About.com shareholders will receive 45.2 million shares of Primedia, or 2.34 Primedia shares for each About.com share. The valuation of the deal was based on Primedia's Oct. 27 closing share price of $15.25 and About.com's closing price of $23.88.

The combination will create a company that can tap revenues from advertising in its online and traditional publications, executives said.

The deal is expected to close in the first quarter of 2001.

Primedia runs a network of human-interest magazines, including Seventeen, New York and Modern Bride, as well as a school TV service, Channel One Network. It also has stakes in an array of Web companies, such as MyPoints.com, CarsDirect.com and Utility.com.

About.com solicits general Web users to become editors for the company based on their areas of expertise. These editors create and populate topic-specific areas by organizing Web links and gathering information. The site's revenues are largely based on sales of relevant advertising in these editorial areas.

Primedia said it liked the potential it saw in the Web site. "The merger brings to Primedia one of the most successful operational teams in the Internet space," Tom Rogers, chief executive of the company, said in a statement. "By adding the cross-promotional power of Primedia's 200 million user and reader base, the ability to accelerate consumer reach will be very significant."