Today RSS monetization tool Mediafed announced that it has acquired social news reader Taptu, in a deal the terms of which were not disclosed. Launched in 2007, London-based Mediafed monetizes RSS, and works with over 1200 publishers including The New York Times and The Guardian, with 125 million users in its network. The majority of the Taptu team will join Mediafed, though Taptu CEO Mitch Lazar will only stay on as an advisor to the board.
Mediafed CEO Ashley Harrison said in an interview that by acquiring Taptu, they hope to become a leading digital publisher, and to find a way to monetize RSS where other social news readers haven’t. Mediafed works with publishers to promote and track their RSS feeds, and they currently work with over 1,000 advertisers and brands to place ads in publishers’ RSS feeds (on a CPM model with 50/50 revenue share between Mediafed and publishers). Harrison said he met the Taptu team a year ago when they were looking to monetize some of the feeds they were working with on the Taptu platform.
“The more work we did, the more I got to know what a fantastic product it is, and it seems a perfect synergy with the large user base we have, to look for a consumer-facing app user interface that will be complimentary with our cloud architecture, and Taptu very much fit the bill,” he said. Harrison said they’ll be introducing the Taptu app to their user base, which he said will give publishers more syndication reach, and more revenue by default.
Taptu was founded in 2006 to focus on mobile search, but re-launched in 2010 to focus on news aggregation apps. The company’s mobile news reader lets users on web, iOS, Android, and mobile web “DJ their news” by combining news sources into streams. Much like other news readers like Prismatic and Trapit, users can create news feeds around topics, sources or keyword searches. The company also raised $3.5 million in September 2011 to build its mobile publishing platform, Tapform, that powers content for The Guardian Environment, among other publications.
Taptu CEO Mitch Lazar said the acquisition makes sense because it combines Mediafed’s track record of monetizing content with Taptu’s technology. ”Mediafed, while quietly working very hard over the last six or seven years, they’ve been profitable and have been able to create an exciting business that’s generating revenue for publishers and using their content in a really creative way,” Mitch said. “By plugging that together with our platform and our team, it creates a great combination that really is unrivalled.”
Before pivoting to a social news reader, the company sold search and display ads, but had only integrated advertising into the current version on Android through a partnership with Google (with a paid plug-in for users who wanted to remove ads). Now they’ll be expanding on their initial venture into ads. “We’ll just expand on that opportunity now in a variety of ways,” he said. They’ll continue to honor the partnerships they have in place using Tapform, and will offer the white labeled solution in future “where appropriate.” Harrison said they’ll be introducing the Taptu platform to their existing advertiser and publisher base in the next few weeks. “On tap of that they’ll get these premium feeds that Mediafed has,” Lazar said.
There’s no shortage of competition in the news reader space, primarily Flipboard, which announced a deal with the The New York Times in June to provide content to subscribers, and splits ad revenue with the publisher. Similar app Pulse announced a similar deal with the Wall Street Journal, and took a different approach to monetizing it by launching its Premium Sources paid content subscriptions. Though they’re beginning to explore monetization options, Lazar believes they’ve been focused on building beautiful apps and forming publisher relationships rather than revenue. ”That competitive set haven’t really been able to monetize effectively in the news reader space,” Lazar said. “They’ve been stuck in this gap of not being able to make money and monetize, they’ve garnered publisher relationships but they haven’t really been able to make money and make the register ring.”
The majority of Taptu’s team, 35 people in total, will be joining the Mediafed team, and will maintain their Cambridge, UK presence. Taptu has been focused lately on localizing their apps, debuting French, Spanish, German, Japanese, and Korean versions, with plans to add Russian, Chinese, and other versions. Since Mediafed has a presence in 55 countries, this international presence could be a boon as they integrate the platform and further localize. With people speculating about how mobile news readers will effectively monetize, whether through ads or subscriptions, Mediafed is in a good position to apply its existing business model to Taptu’s assets.