The deal will help Discovery -- which owns more than 100 global networks, including its flagship Discovery Channel -- market its huge video library over the Internet.

W. David Gardner, Contributor

October 15, 2007

2 Min Read

Hoping to get a boost for its sluggish online digital media strategy, Discovery Communications reported Monday that it is acquiring HowStuffWorks (HSW). Discovery did not announce the terms of the agreement, but the Wall Street Journal, which interviewed Discovery's CEO, said the acquiring firm was paying $250 million in the deal.

The deal will help Discovery, which owns more than 100 global networks including its flagship Discovery Channel, market its huge video library over the Internet.

"One of my early challenges at Discovery was determining how best to build a robust digital media portfolio," said David Zaslav, Discovery's president and CEO, in a statement. "With HowStuffWorks, Discovery now has a solid platform for strengthening our digital businesses, leveraging our video assets to create new experiences for users, advertisers, and our distribution partners." Zaslav took over top post at Discovery in January.

HSW's CEO Jeff Arnold will continue in his position as HSW becomes a subsidiary of Discovery Communications. He said the combination of HSW's articles and Discovery's video library of 100,000 hours of video programming will constitute a sort of "video Wikipedia" in which users can experience a multimedia experience in answer to their questions.

HSW was founded in 1998 by Marshall Brain, a professor at the State University of North Carolina. In a Web posting Monday, Brain suggested that users try out the new offering. "Like Discovery, HSW has built a strong reputation on quality content that appeals to millions of people wanting to learn, and all of it is search-engine friendly."

The deal brings together some powerful media and financial tycoons. HSW's major investors include Carl Icahn, who has significant financial positions in several companies; Discovery Communications is owned by the Discovery Holding Co., Advance/Newhouse Communications, and John S. Hendricks, the founder and chairman of Discovery. Discovery is largely controlled by cable mogul John Malone, according to media reports.

The acquisition of HSW signals an aggressive move by Discovery into online digital media; in recent months, Discovery has been closing its retail stores and cutting its workforce.

The HSW Web site, which has 11 million online global monthly visitors according to Omniture, also will contribute additional properties to the merger including its digitized maps unit, medical-oriented QuickCompliance, and Discovery is planning to debut a new TV program entitled "How Stuff Works." The program, according to Discover, will "explore an expansive universe of topics."

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights