announces that it has agreed to acquire HowStuffWorks
, the online source of high quality, unbiased, and easy-to-understand explanations of how the world actually works. Acquiring HowStuffWorks further strengthens Discovery Communications' global position as the number-one nonfiction media company dedicated to providing knowledge and satisfying curiosity across all platforms.
HowStuffWorks' 11 million global monthly unique visitors, which have grown 25% over the past year, have access to an extensive and rapidly growing library of deep and broad content designed to deliver the most relevant information possible. In addition to an editorial team that creates new content every day, HowStuffWorks leverages the exclusive digital rights to over 30,000 books, 800,000 images and more than 180,000 maps as it explains the world from brains to bats, from rocket engines to roller coasters, from hybrid cars to HDTV, and countless other topics.
HowStuffWorks' content is highly ranked by the world's leading search engines and the addition of engaging and informative clips from Discovery's world-class video library will create an even more robust and rich platform for users to easily find high quality, multimedia content. HowStuffWorks is regularly cited as a trustworthy source, earning widespread recognition including multiple Webby awards, Time magazine's "25 Web Sites We Can't Live Without" in 2006 and 2007, and PC Magazine's "Top 100 Web Sites" four times including in 2007. HowStuffWorks' management team is led by CEO Jeff Arnold, who founded WebMD and The Convex Group.
"The HowStuffWorks acquisition is a strategic bull's-eye for Discovery. As the leader in knowledge and curiosity on television, we are proud to partner with the experienced management team of HowStuffWorks, the leader in knowledge and curiosity online," said David Zaslav, President and CEO, Discovery Communications. "One of my early challenges at Discovery was determining how best to build a robust digital media portfolio. 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, and taking those opportunities around the globe."
"To continue meeting consumer expectations and aggregating large audiences, HowStuffWorks partnered with a global media company with a complementary brand and extensive media assets," said Jeff Arnold, who will continue his role as CEO of HowStuffWorks. "Contextually integrating engaging clips drawn from Discovery's vast video library of more than 100,000 hours of programming with the family-friendly and evergreen collection of expertly written articles on HowStuffWorks will ultimately deliver an accurate 'video wikipedia.' Information-seeking consumers will find a rich, multimedia experience to answer the world's questions, and our business partners will find new opportunities to reach targeted audiences of engaged consumers."
"In the fragmented world of the Internet, with more and more people accessing information through search engines, high-quality content will be increasingly important," said Bruce Campbell, President, Digital Media and Business Development at Discovery Communications. "The natural alignment between Discovery's video clips that span so many genres and contextually relevant HowStuffWorks articles will expose our programming to a wider audience and drive more visitors to HowStuffWorks and our other online properties."
As part of its complementary on-air/online strategy, Discovery is actively expanding its programming franchises dedicated to popular science and popular technology, such as the hit TV series MYTHBUSTERS and HOW IT'S MADE. The company is developing and producing additional programming in these genres that is easily edited to short video clips that can be utilized to enrich the content on HowStuffWorks and Discovery's other online platforms.
The first of the new TV programs, HOW STUFF WORKS, marks a big step in the convergence of television programming and internet content. Focusing on man-made systems, natural phenomena and technology, HOW STUFF WORKS will reconnect viewers to the everyday world. The program will explore an expansive universe of topics such as how mummification works; how telescopes work; how the Bermuda Triangle works; and how solar panels work. A revolution in TV-Internet programming, the show will air daily on Discovery Channel beginning in Summer 2008 in the United States, with worldwide rollout expected soon thereafter.
As part of the HowStuffWorks transaction, Discovery Communications will acquire a portfolio of other digital properties that complement the Discovery brands, including expert ratings and reviews from ConsumerGuide.com, an extensive database of digitized maps owned by GeoNova Group (formerly MapQuest Publishing), and QuickCompliance, a medical education business that complements Discovery's existing health businesses. Through HowStuffWorks, Discovery Communications also will hold a minority equity position in HSW International, a separate and publicly traded entity that has the local language rights to the HowStuffWorks content and brand in Brazil and China. HowStuffWorks current shareholders will maintain a significant equity position in HSWI. Discovery Communications intends to enter into a licensing agreement providing certain content rights to HSW International in Brazil and China.
HowStuffWorks and these additional assets will become a subsidiary of Discovery Communications. HowStuffWorks will continue to be based in Atlanta, Georgia. Discovery has no immediate plans to significantly change the 160-person team or its operations. The impact to Discovery Communications' operating cash flow will be immaterial in year one. The deal is expected to close later in the fourth quarter of this year after requisite approvals have been received. For this transaction, Discovery Communications was advised by Lehman Brothers and Debevoise & Plimpton LLP, and HowStuffWorks was advised by Allen & Company and Alston + Bird LLP.
HowStuffWorks is the most recent in a series of online initiatives that build upon Discovery's core strengths and brands, including Animal Planet Media's acquisition of Petfinder.com and the recent purchase of TreeHugger.com, which will support Discovery's new Planet Green television network. The revised Discovery.com Web site, rich in video experiences, was recently named by AdWeek and MediaWeek to their Third Annual "Digital Hot List: Best of the Web 2007."