ViralNova, one of the first sites to figure out how to turn Facebook’s News Feed into a geyser of traffic, has a new owner. Danny Zappin, the entrepreneur who cofounded YouTube network Maker Studios, has purchased the 24-person operation and is folding it into Zealot Networks, his collection of digital media companies.
YouTube Pioneer Danny Zappin Buys Facebook Content Factory ViralNova
It’s the second time a Facebook-fueled publishing startup has sold this year.
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
Zappin won’t disclose a purchase price for ViralNova but says he bought it with cash and stock, and that the deal could ultimately be worth more than $100 million to its two owners, founder Scott Delong and CEO Sean Beckner.
But that is a very fuzzy number, since Zappin says it depends on Zealot’s equity value increasing, as well as earnout goals the two men would have to hit.
How about this for a more accurate accounting: “It’s a big event for Scott and me,” Beckner said. That seems reasonable, since Beckner, who bought a controlling stake in the company last year, says the company never took any outside funding.
Beckner says ViralNova is profitable and on track to generate $35 million in 2015. The transaction is the second time a big Facebook-fueled site has traded hands this year. In January, the U.K.’s Daily Mail bought Elite Daily for a reported $47 million.
Delong famously started up ViralNova by himself in 2013, and until recently ran it with a skeleton crew skilled at finding stories that were already popular on social media and redistributing them on Facebook with better headlines and art.
That turned out to be a very efficient way to generate traffic on Facebook. How much traffic depends on whom you ask: Beckner says his internal numbers show his site has attracted as many as 100 million visitors a month. ComScore, the Web traffic counter most advertisers rely on, says the site’s U.S. traffic peaked at 36.7 million last fall, and has often been much lower; its May traffic in the U.S. was down to 13.3 million.
It’s an open question whether ViralNova and other Facebook-centric Web publishers will be able to continue leveraging the network into traffic. But Becker says he has spent the past year building out his reach on Twitter, Pinterest and other platforms, and that Facebook now represents no more than 60 percent of his traffic.
Like other viral traffic startups, he has also been trying to upscale his content and pitch. This year, Delong and Becker moved the company from Ohio to Manhattan (it occupies office space formerly rented by Mic, another Facebook-savvy content company) and sought out press coverage, telling reporters the company was not for sale.
But Zappin — who helped build up Maker Studios into one of the biggest networks on YouTube and was then forced out of his company a year before it sold to Disney for up to $950 million — found otherwise.
Zappin says he cleared more than $25 million from the Disney deal, and he put much of that money into Zealot, a portfolio of ad-related digital companies. ViralNova is his 15th acquisition, but the first one with a consumer focus.
This article originally appeared on Recode.net.
