The digital arm of the Nine Network has made an offer to purchase a majority stake in CarAdvice, a 10-year-old business that offers reviews of motor vehicles and makes money from advertising.
Nine Digital this morning confirmed the two companies were in close discussions. Crikey hears the deal, which has yet to be finalised, values the car review company at $35 million — which is a million times as much as the startup’s founder Alborz Fallah invested in 2006 to buy the domain name.
In a statement, Nine does not reveal the price that comes with its offer:
“Coupled with a minor equity injection (comprising cash and contra), NEC intends to hold a majority stake in CarAdvice post-completion. The offer to shareholders incorporates a path to 100 per cent ownership by NEC within three years.”
“CarAdvice provides high-quality, independent editorial content for new car buyers and influences, with a key focus on video and audio casting. CarAdvice offers highly targeted and premium advertising opportunities for the automotive industry.”
Nine’s chief digital and marketing officer Alex Parsons said the start-up will help Nine’s exposure to automotive advertising. “Automotive is the single largest ad category for both TV and digital, with ongoing migration online. This is a great example of us targeting verticals which we believe we can build and ultimately own through the cross-promotional capabilities of our TV and digital platforms.”
Last year, Fallah told Crikey sister site SmartCompany that the website had grown because it adapted the genre to the internet. “Previously, car journos would go to the launch of a car and publish the story in a week. We started putting a rule in place that we would have a story up in 24 hours,” he said.
Nine has been beefing up its digital division. It recently hired Helen McCabe, most recently editor of Australian Woman’s Weekly, to oversee its lifestyle verticals. The company has launched a BuzzFeed-style viral website in Pickle, and this month consolidated all its websites under the nine.com.au domain — a move that caused it to shoot up the online news audience rankings.