Yahoo! to open major Denver office as part of Associated Content acquisition

Lately, major businesses like Frontier Airlines and Qwest have made news for decreasing their presence in Denver, not expanding it.

But Yahoo!'s acquisition of Associated Content last week brings more positive tidings.

Associated Content founder (and newly minted Yahoo! vice president) Luke Beatty reveals that Yahoo! will be opening a new office in the Cherry Creek area to serve as Associated Content's new home and its Denver beachhead.

And the company will be staffing up.

Beatty, who used $100,000 in seed money to start Associated Content in his basement back in 2004 (learn more in a 2007 Westword profile), sees the sale as an "awesome outcome." And while he can't comment on the terms of the agreement, reported to be in the $100 million range, he shoots down reports that AC has spent quite a bit of time on the block.

"Several larger media companies have tried to buy us over the last few years," he says. (AOL was reportedly among the suitors.) "But we've always been well-capitalized and building more value every day, so we've never been for sale, per se."

The dynamic began to change as Associated Content built a relationship with Yahoo!

"We've been working with them for the last several months, delivering them hyper-local content," Beatty says. "They're in the process of really trying to personalize and create enormous amounts of relevancy for the content they're delivering to their consumers. They're on a huge push to deliver people content both passively and proactively."

He describes the philosophy behind the initiatives like so: "When you go to the front page of Yahoo! in a city like Cleveland, you're not just getting something about 'ten fun things to do in Cleveland.' You're getting content that's more granular, according to who you are and what you do. Now, a staff of a hundred content creators can't do that. But a massive network of over 380,000 contributors can."

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These pilot programs proved so successful, Beatty maintains, "that over time, we realized this was a perfect fit. They're the number one media brand on the web. They touch basically half the people on the web and get 600 million unique visits on a monthly basis.

"For our contributors, that's what they're looking for. They want to be in front of the biggest audience possible, and our contributor base is certainly what drives us. And it really allows Yahoo! to open up a whole other layer of content and relevancy and personalization to the biggest consumer base on the web. And that's when it made sense for them to acquire the company."

Not everyone has been impressed with this marriage. Take this post by Social Media SEO's Robert Holland. After noting that Yahoo!'s stock price fell on news of the acquisition, he disagreed with a press-release assertion that AC produces "high-quality" content. "Isn't it Associated Content that pollutes the top search results with garbage content that is written solely for the purpose of search engine exposure in Google?" he asks. "Tactics such as keyword stuffed articles and titles run rampant at Associated Content."

Shots like this have often been taken at Associated Content, with doubters denigrating its potpourri of news stories, consumer reviews, how-to guides, pop-culture ruminations, takes on current events and more because they're typically generated by writers who lack a formal journalism background. But Beatty sees such criticism as shallow.

"Journalism is about news, and only about 10 percent of what we create is news," he says. "Do I think there should be a White House correspondent with a journalism degree who really knows what they're doing? Yeah, I do. But for a lot of the content that we're talking about, what matters most is experience, authenticity and hyper-relevancy. Say I'm interested in knowing about child-care programs in Poughkeepsie, New York. Are there a lot of professionally trained media personalities out there who want to craft an article about that -- one that's going to be seen by twenty people a day for the next five years? I don't think so."

As for who's doing the writing for Associated Content, Beatty says "our contributor base is about a third and a third and a third. About a third are social-media people who are just interested in exchanging information. Another third are professional people like doctors and researchers and lawyers with information they want to get out. For them, it's not about getting paid, but about sharing what they know. And they're writing about things a traditional freelance writer would cover. For a story about the latest trends in arthritis care, a freelancer would interview the doctors who are creating content for us. And the last third are professional media members creating new content or publishing a story that might have appeared in Billboard magazine or something that they now have the rights to. So we're crowd sourced, but our crowd is a range that skews much more to people with a background in content creation."

While this concept still isn't universally accepted, it's got far more converts than was the case half a decade ago.

"When we first started Associated Content, I would go around and try to talk to traditional media companies about partnering with us, and we'd get laughed out of the gym," Beatty concedes. "They'd say, 'You should never let the inmates run the institution.' But now, CNN has iReport, which generates a huge amount of their traffic. And that's because consumers actually like it -- and it makes sense for companies, too. If you want to find out how the economy is doing in Des Moines, Iowa, you can pay a freelancer to pull up in a rental car and try to find out -- or you can get the perspectives of a local doctor, a local factory worker, a local whatever. And people may appreciate that more."

Associated Content's numbers appear to bear out this claim. In March, comScore, a firm Beatty describes as the web equivalent of television's Nielsen ratings service, estimated that AC was generating sixteen million unique visitors. "Our internal figures are significantly higher than that," he says. "But sixteen million uniques is more than the Washington Post, more than TMZ, more than the New York Times. That puts you up in rare air. There are lots of other companies that aren't media companies that do a lot of traffic: travel sites, e-commerce sites. How you break that up depends on what your definition of media is. But we're definitely a top-fifty site."

And a growing one at that. Currently, AC's staff of approximately 45 folks (not counting another twenty people in the New York branch) works out of cramped offices near the Cherry Creek Shopping Center, "but we're looking for a new Yahoo! space in Cherry Creek now," Beatty says. "And I think that's awesome news for Denver. This is the web's biggest media company opening up a presence they don't currently have. That's a cool flag to have in this town."

Just as important, "we'll be hiring, and we're going to be super-active on the community front. Yahoo!'s very committed to Denver, and so am I."

It's too soon to say how many positions Yahoo!/Associated Content will be adding to its Denver operation, or what type. The majority of employees in Denver are in the engineering department, tasked with creating the platform for the content and keeping it flowing, while the rest are content managers -- the equivalent of editors in an old-fashioned newsroom. Beatty emphasizes that an actual person looks at every piece of content that AC puts out. Moreover, he's hired several people who once worked at the Rocky Mountain News, which closed just over a year ago, including engineer Jason Curran, designer Leonardo De La Rocha and Tim Skillern, who served in assorted editorial capacities at the Rocky.

The future of another key player -- CEO Patrick Keane, profiled by Westword last year -- is less certain. Reports have him considering a move to head up sales for Yahoo!, and that'd be fine by Beatty, who considers him to be both "one of the best strategy guys on the web" and a personal friend.

For his part, Beatty confirms that he's planning to work with Yahoo! "for several years down the road." However, he gives much of the credit for Associated Content's rise to "this massive network of people who have created the content. This is a huge success story that's been built on the hard work of hundreds of thousands of people who made this happen. It's a people-powered program, and totally a people-powered success."

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