A WEBSITE launched from a Banchory-based teenager’s bedroom is expected to be sold to international news network CNN in a deal rumoured to be worth $200 million (£127.9m).
Mashable, a popular news website about social media, now based in New York and San Francisco, was founded seven years ago by Aberdonian Pete Cashmore when he was just 19 and is estimated to have 20 million viewers a month.
The sale of the business to CNN, which already has a syndication partnership with Mashable, is set to make Cashmore a multi-millionaire although the exact size of his stake is not known. Some reports have suggested he could become Scotland’s most successful tech entrepreneur after magazine Forbes suggested he owned 100 per cent of the firm. Last year, Cashmore told a US newspaper that the business did not rely on private investors for financing.
Felix Salmon, a blogger for Reuters, yesterday reported the potential buy-out on an online video from the influential South by Southwest technology conference in Austin, Texas. The New York Times also reported that the two companies were in “advanced” talks.
Last year, Cashmore’s firm was being wooed by web services firm AOL. It was reported that Cashmore turned down their $11m offer.
Instead, AOL went on to buy online newspaper, the Huffington Post, for $315m. The firm also bought TechCrunch, a similar tech blog to Mashable, for $25m in 2010, although it is largely thought that the tie ups between major media companies and the niche, cutting-edge sites have blunted their appeal amongst their core audiences.
In 2009, AOL demerged from its former owner, Time Warner, which still owns CNN – setting up the possibility of a heating up of the rivalry between the two media giants. Cashmore, 26, who describes himself as a “lifelong fan of unicorns”, was unavailable for comment.
The college dropout set up Mashable in 2005 as a one-man blog about social media sites such as Twitter and Facebook. It was reported that he did it because it was “something I could do in bed and feel like I was achieving something”.
In February last year, the site which features “top ten lists” of viral favourites on social media sites, took its advertising sales operations in house after it ended an arrangement with publishing network Federated Media.
The privately-held firm generates revenues from display advertising, custom programs with marketers, event sponsorships and conferences and employs more than 40 people.
CNN said: “We do not engage in speculation about our business and we aren’t commenting on these reports.”
Rumours that a deal would be announced as soon as today were dismissed by sources close to the media giant. Twitter users suggested Cashmore denied that a deal would be announced this week in an e-mail to staff.
Time Warner last month reported that its revenues were up 8 per cent for the full year to $29 billion, bringing in profits of $2.9bn for the year. Jeff Bewkes, Time Warner’s chief executive, said the firm planned to increase its investments in digital initiatives, which he described as be “key” to the conglomerate’s growth.