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More on Sprinks: It’s the distribution

I’ve been thinking a bit more about the Sprinks deal, mainly through the lens of what’s happening to Google’s world. It’s simple, but true: When Yahoo switches over to its own internal search technology (which will happen soon – probably in the next two or three quarters), Google will lose a shitload of distribution. Seen in this light, it only makes sense to buy more through About.com, which is the fourth or fifth largest content site on the Web. If the IPO timing rumours are true, it would make no sense for Google to go public, then get clobbered when the other Yahoo shoe drops. Hence, the Sprinks deal is less about Sprinks, and far more about getting About.com’s distribution. The original press release and other coverage shows this was all about higher margins for Primedia, and gaining distribution for Google. Google’s own AdSense/AdWords will be used across the About/Primedia properties, not Sprinks. Sprinks itself will probably be kept on life support for a while, then killed/replaced with Google products. In this DirectNews article covering the deal, Kevin Lee put it well: “I don’t see it as a technology play. They made a case to Primedia that the cash flow would be higher with them than their own internal property.” Primedia, which is under significant debt burden and must focus on its core magazine business, is driven by a need to simplify its business and add to its margins. Google needs distribution to cover its anticipated losses from Yahoo’s future moves. Voila, a perfect union.

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