ValueClick Gets Into Financial Content With Investopedia Deal


In a sign of continuing problems at Forbes Media, the company has sold, a comprehensive financial content site that it bought amid great fanfare in April 2007. That deal was supposed to be a sign of the positive influence Elevation Partners would have on Forbes Media after the firm purchased a large minority stake four years ago. After all, the thinking went, Elevation Partners would leverage its tech abilities to transform the troubled Forbes magazine and its parent company.

Unfortunately, the deal's timing was terrible because the global financial system began to unwind in 2007. According to recent estimates, the value of Forbes Media has plunged from $750 million to $100 million since 2006.

So, today Forbes Media sold Investopedia to online advertising operator ValueClick (VCLK), which has agreed to shell out $42 million in cash for the operation.

Not Just Just a Hodgepodge

After graduating from the University of Alberta School of Business in the late 1990s, Cory Janssen and Cory Wagner saw a big opportunity to develop a financial educational website for investors. Like many startups, it was formulated over some beers. But the site wouldn't be a hodgepodge of information. Rather, it would be organized like an encyclopedia. So, was born.

As of now, the site is a rich source of content, with over 30,000 articles. It provides investment simulators and even games to help investors learn new concepts. Every month, Investopedia gets roughly 2.2 million unique U.S. visitors, without much help from advertising. Essentially, Investopedia's traffic is mostly organic because of its finely tuned content and strong Web brand.

ValueClick has built a diverse platform of online products, such as ad-serving systems, affiliate networks, comparison-shopping sites, online coupons and so on. In the most recent quarter, its businesses generated $95.7 million in revenues and $27.5 million in adjusted EBITDA. But ValueClick has been looking to find new areas for growth, meaning more acquisitions.

Extendable Content Platform

The deal for Investopedia appears to be an excellent fit. ValueClick can leverage its online assets as well as advertiser relationships. Plus, the Investopedia content platform can be extended into other categories.

What's more, the valuation is reasonable. Based on current projections, Investopedia is expected to generate $10 million in revenues and $5 million in adjusted EBITDA for 2010. And as long as ValueClick invests more resources in the property, Investopedia should be a nice source for growth.