CNN-owned Zite news app has been acquired by Flipboard.
When Mike Klaas and Ali Davar created "Worio" in 2005, they had one thing in mind: build the world's best place to discover content. Years of hard work led the duo to launch their first ever news app for the iPad.
Called "Zite," it was dubbed as a "Flipboard killer." Both Zite and Flipboard competed in the mobile news aggregation market. Zite's strength is in filtering topics, scanning hard-to-find articles on the web. Flipboard, meanwhile, relied on the power of publications. The two were different products, at least technically, but they shared the same vision.
Today, Flipboard and Zite are finally joining forces.
At a press conference earlier today, CNN and Flipboard announced the deal. The financial details were not disclosed, but sources revealed to Fortune that it is an all-stock deal. Zite was acquired by CNN in 2011 for $20 million. Sources added that the stock value Flipboard paid for Zite is valued more than the price that CNN paid in 2011.
Explaining the reason for acquiring Zite, Flipboard CEO Mike McCue says that Zite's real value is in its technology.
"We acquired Zite from CNN to address something we’ve heard from a lot of you: although you can already read thousands of sources from over 20 regions on Flipboard, you want easier and better ways to discover content about the things that matter to you, " writes McCue. "Adding Zite’s expertise in personalization and recommendations to Flipboard’s product experience and powerful curator community will create an unparalleled personal magazine for our millions of readers."
McCue added that Zite users can still use the app. But according to Zite co-founder Mike Klaas, Zite will not be around forever. The goal, Klaas said, will be to integrate Zite into Flipboard.
"We will also build a way for you to transition your data from Zite into Flipboard. Until then (for six months at a minimum), we will continue supporting Zite. Our users mean the world to us; after all, what Flipboard saw in us, you saw first. We hope you come with us and help us shape the future of news," Klaas added.
Flipboard will also absorb Zite's 13 employees. Zite CEO Mark Johnson will not be joining Flipboard. Johnson, a former senior product manager at Microsoft, also confirmed the deal on his LinkedIn page.
"The combination of our two teams is going to be an epic force. Zite has a small but stellar team with expertise in building a discovery engine and an interface to harness the full power of that engine," Johnson said. "With Flipboard, Zite’s technology finds a distribution megaphone of more than a hundred million users worldwide. Zite’s team will find a new home to realize our dream of building the world’s best place to discover content."
Furthermore, CNN is also making its official debut on Flipboard. Readers of the popular social reader can now enjoy feeds from popular CNN content including "Anderson Cooper 360," "The Lead with Jake Tapper," "GPS Daily," and “Inside Politics.” CNN and Flipboard also announced a new mobile ad partnership.