The integration of old media and new media can often be like trying to mix oil and water. Even when smart media entities have been proactive in approaching the new digital paradigm - the world of smartphones and tablets, social and serendipity - they have failed either through poor decision making or not putting in a full effort.
The CNN Difference
But CNN is different. Where many newspapers and cable companies have faltered, CNN has thrived. A lot of the credit goes to the cable news company’s acquisition of Zite, the makers of a popular iPad news app.
Many ZIte users cringed when they heard that CNN was taking over. The acquisition had all the hallmarks of the failed strategies that have been replayed over and over in big media since the advent of the Web: aging media behemoth thinks it can innovate by acquiring hot new media startup, then runs it into the ground.
For Zite’s part, it was apprehensive about being acquired in the first place.“To be blunt, we had no desire for Zite to be acquired after what happened at Microsoft,” said Zite CEO Mark Johnson.
Johnson was part of Powerset, a semantic search startup that was acquired by Microsoft in 2008. Johnson notes that out of about 60 people from Powerset that went to Microsoft, only about six of them are left at the company. So when CNN approached Zite about an acquisition last year, Johnson was wary about going in that direction.
A Surprisingly Happy Marriage
The acquisition has turned out well for both parties. Instead of CNN gutting the Zite team and letting the product languish, Zite got its own office in San Francisco and has actively hired more employees. “I had very frank conversations with [KC Estenson, CNN senior vice president and general manager of digital] about what the structure would be,” Johnson said.
On the flip side, Zite has provided CNN with a variety of positive elements. Estenson noted that Zite gives CNN a presence on the West Coast with the ability to “tap the mindset of San Francisco.”
CNN digital has a history of thinking progressively about online news dissemination. Zite gave CNN a distinct mobile discovery engine with backend technology that could be worked into CNN’s homepage. The next phase was to make sure that Zite survived the acquisition.
Estenson was very cognizant of Johnson’s concerns. “We wanted Mark and the team to have the freedom to try new things,” Estenson said.
Zite Kept Growing After The Acquisition
Zite has spread from an iPad-only app to a variety of platforms, including the iPhone as well as Android tablets and smartphones. The company launched branded advertising and a publisher program. Last week it launched its first integration with the parent company, called CNN Trends, powered by the Zite technology stack. CNN Trends pairs original CNN coverage with popular related stories from around the Web. "CNN is what you need to know, Zite is what you want to know,” Estenson explained.
So, why has the CNN/Zite partnership worked so well?
Many people thought that an old media company like CNN would not understand what Zite was doing and eventually force it to bend to the larger company's will. That has not happened.
To CNN’s benefit, it recognized that it had bought not just a popular news discovery app, but the technology behind it.
Zite started as a group of researchers in Vancouver that had a product called Worio (Web Of Research, Iteration One), which provided serendipitous discovery through a search engine. Worio was built around the concept of personalized search that recognized not just what you were searching for, but the topics related to it. The approach of personalized news and content discovery is what appealed to CNN. Estenson says that topic personalization will be the future of how big media brands need to market content.
CNN Kept An Open Mind
The fact that Zite has survived the CNN acquisition suggests that the cable news giant kept an open mind when it approached Zite. CNN recognized that it needed some skin in the mobile game and Zite has provided that - along with key backend technology to improve CNN’s homepage.
In the end, the combinattin has formed a rare success story in an arena where new media and old media typically fight for eyeballs: a mutually beneficial relationship built on trust and respect.
“There is a deep respect from me and the other CNN execs for the Zite team,” Estenson said. “We are not bullshitting about how much we get along and how well we work together.”