Zealot Networks Buys Viral-Style Web Publisher – NASDAQ.com

By Mike Shields and Steven Perlberg

(FROM THE WALL STREET JOURNAL 7/10/15)

Zealot Networks has acquired ViralNova, a Web publisher that serves adult a kinds of brief videos and articles that are
often called “click bait” — like antics of baby animals or people doing weird things, with a wish that they will go
viral on amicable media.

Zealot, a digital media and selling association built by former Maker Studios Chief Executive Danny Zappin, didn’t
disclose a terms, though a chairman informed with a matter pegged a understanding during tighten to $100 million. About 50% of the
price is formed on earnout supplies for expansion in income and Ebitda by 2017, while a rest is a multiple of
cash and stock, a chairman said.

Zealot is shopping a publisher that while profitable, specializes in a often-volatile business of pushing trade to
its website around Facebook News Feeds. ViralNova reached 17.6 million singular users in May, down from some-more than 37 million
people in January, according to comScore. Despite a swings, Mr. Zappin is betting that ViralNova’s intensity audience
reach can assistance Zealot’s mashup of digital selling businesses foster new artists, calm and advertisers.

The bigger doubt is what does this meant for a destiny of a attention as a whole, when all it takes is a simple
Facebook algorithm tweak to send trade for a amicable media-dependent publisher’s click-bait calm — and resulting
advertising sales — mountainous or plunging.

Facebook gathering 90% of ViralNova’s trade final year. Now that’s down to 60% as it looks to variegate leads with
newsletters, Pinterest and approach website traffic.

The merger of ViralNova’s comes as viral-style publishers face augmenting uncertainty. There are substantially too
many of them and a singular pool of suitors, according to Jay MacDonald, CEO and co-founder of Digital Capital Advisors.
But some normal media companies will sojourn meddlesome acquirers to get a reason of amicable edition expertise and
technology.

Meanwhile, changes are stirring during Facebook that bluster to marginalize viral publishers, many of that scour the
Internet to repackage humorous photos or videos with must-click headlines.

Facebook has sealed on publishers such as a New York Times, BuzzFeed and National Geographic for the “Instant
Articles” program, that allows them to tell directly on Facebook’s height instead of regulating links to route users
to their possess sites. Facebook also has done a large pull to hide video directly, scoring outrageous viewership numbers in the
past few months.

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  07-09-151942ET
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