Zite: What does Flipboard want with the news app?

Flipboard is acquiring Zite from CNN in a deal that could be worth as much as $60 million. 

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    Flipboard is acquiring rival Zite. Here, a user signs on to the Flipboard mobile app.
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Flipboard has acquired the personalized news app Zite from CNN in a deal that could be worth as much $60 million. 

Zite, like Flipboard, is a platform that can be used to create a customized magazine – you give it a few cues, and it builds a small compendium of articles and photographs that it thinks you might like. The software was created a couple years back by developers Ali Davar and Mike Klaas, and eventually acquired by CNN for a reported $20 million to $25 million. 

Now Zite is shifting hands again. As a part of the deal between CNN and Flipboard, the latter company will create "custom magazines" based on CNN programs anchored by Fareed Zakaria, Jake Tapper, and John King, among others.

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The exact terms of the acquisition were not disclosed, although that $60 million, Laurie Segall of CNN reports, takes "into account future advertising revenue." (In addition, the Wall Street Journal reports that 20 employees of Zite will move to Flipboard headquarters in Palo Alto.)

In a blog post, co-founder Mike Klaas said that Zite would soon be incorporated into the Flipboard platform. 

"I don’t want this to be the type of acquisition announcement that glosses over all bad news, and there is some: the Zite app is not going to be around forever," Mr. Klaas wrote. "Our goal is to get the things that are great about Zite into Flipboard before shutting it down. 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." 

So what does Flipboard want with Zite, exactly? Well, officially, Flipboard says it will use Zite technology to improve its own product, and there's probably some truth to that. But it's also clear that in gobbling up Zite, Flipboard takes one more competitor out of the running, and gets a little more market space all to itself. 


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