Exclusive: Yahoo Eyes CafeMom for $100 Million Acquisition
According to numerous sources, Yahoo is eager to close a deal to acquire CafeMom, a social-networking and community site aimed at mothers, in a move aimed at turbocharging its often-meandering strategy in the important women’s space.
The price being offered, said sources, is hovering at $100 million, about the same amount Yahoo (YHOO) recently forked over for Associated Content.
The deal might not happen, of course, but several sources said the pair have been deep in negotiations in recent weeks.
CafeMom, sources said, has wanted to hold out for a higher price of closer to $200 million or more. Other interested buyers include Disney (DIS), sources added.
The New York-based CafeMom has been knocking around for a long time in Internet terms, morphing from a sister company owned by CMI Marketing called ClubMom back in the Web 1.0 days.
CMI, which was founded by Andrew Shue and Michael Sanchez, finally got two big fundings in 2008 totaling $17 million, both from Highland Capital Partners and Draper Fisher Jurvetson.
Sanchez is CEO, but Shue–known for his BoomTown-approved role as the endearingly whiny Billy (But, Alllllliiiisoooonnnn…) on the original “Melrose Place”–is also deeply involved.
On its Web site, the company claims it has 6.7 million unique visitors on its main site and 18.7 million more on its network of affiliated sites, with 100 million page views.
CafeMom said on its Web site that it was profitable, and sources said its revenues were about $25 million to $30 million annually.
Moving from what was essentially a glorified bulletin board for moms, it has added content and other social-networking tools and games.
For example, it recently launched a blog and content platform named “The Stir”–no, really, it is called that.
A recent article on the sassy blog was titled “Parents Who Smuggle Babies Into R-Rated Movies: Ballsy or Crazy?”
(Ballsy, IMHO! You could go crazy enduring only “Cats & Dogs: The Revenge of Kitty Galore,” as I can testify. You need some “Salt” in your diet.)
This kind of content offering is all in Yahoo’s wheelhouse, of course, as it seeks to reinvigorate itself by bringing in new talent and brands.
In the women’s space, Yahoo has its Shine site, which is very pretty but in desperate need of a social boost that CafeMom can presumably provide.
Yahoo’s head of M&A Andrew Siegel–Andrew, don’t be scared of me! Call, I don’t bite! Only rarely, that is!–also reportedly took a strong look at Sugar, an innovative San Francisco women’s site. But the start-up declined to sell.
The women’s market is a big one for advertisers, with many competitors–from iVillage to AOL (AOL) to a recent effort by Demand Media to reach women using a site created with supermodel Tyra Banks.
Yahoo declined to comment, but a PR spokeswoman said in an email that “women are an important audience and our Shine site is very successful.”
Calling from Minneapolis, where he and Sanchez were visiting General Mills (GIS) and Target (TGT) about advertising deals, Shue declined to comment, though very charmingly (and very unlike the mumble-mouthed Billy).