Barry Diller's IAC offers $300 million for

Aug 21, 2012, 3:57 PM EDT

* Times Co previously confirmed in talks on sale

* Times had preliminary letter to sell to

* Diller's offer at least $20 mln more than Answers offer

By Peter Lauria and Jennifer Saba

Aug 21 (Reuters) - Barry Diller's IAC/Interactivecorp submitted an offer in excess of $300 million to buy information website from the New York Times Co, according to people with knowledge of the situation.

IAC's bid is above the $270 million offer that the Times Cohas preliminarily accepted from, a website backed byprivate equity firms Summit Partners and TA Associates, said oneof the sources.

On Aug. 8, the Times Co said it was "engaged in discussionsregarding the potential sale of its About Group" but did notname any of the parties it was speaking with and said that itcould not guarantee that a deal would be reached.

The website prompted the Times Co's statementwith a report saying had signed a letter of intentto buy for $270 million. President PeterHoran previously served as head of

A week later the Times Co announced that it had hiredlongtime BBC executive Mark Thompson as chief executive, fillingthe position vacated abruptly by Janet Robinson in December. consists of more than 900 "topic sites," whichfeature articles on everything from parenting and cooking totravel and technology that are geared to appear high in searchresults. The portal makes its money by selling advertisingagainst its content.

But began a steady downward spiral after GoogleInc made changes to its search algorithm designed toreturn high-quality results. Last month, amid decliningprofitability, the Times Co wrote down the value of the group by$195 million. The company originally paid $410 million in 2005.

While the Times Co has not held an official auction, a number of companies including IAC and Demand MediaInc had proactively approached the publisher, accordingto sources.

Representatives for IAC and Demand Media declined comment. ATimes Co representative said that the company "does not commenton potential acquisitions or divestitures."

Calls and emails for comment to and its privateequity backers Summit Partners and TA Associates were notimmediately returned.

Given the struggles facing and the Times Co'srecent moves to raise cash by selling assets, much of theprevious interest in was at "firesale prices," saidone of the sources.

But, according to this source, "There are still interestedbuyers who feel that the $280 million price is low and can beeasily matched."

Despite being above's offer, the Times Co hasnot yet responded to Diller's bid, said another source. And withnearly $1 billion of cash and cash equivalents on its balancesheet, IAC could easily raise its current offer should a biddingwar with or another company emerge.

IAC wants to combine with, which hasundergone a strategy shift over the last two years from genericsearch engine to a question-and-answer style service. The ideawould be to leverage the content served up on toanswer questions users pose on's shift to a Q&A style site is owed to its failureto make inroads against Google and Microsoft's Bing inalgorithmic search. Instead of just providing links to relevantwebsites, a service Google's algorithm has mastered, Ask.comalso supplies answers from its user base to search questions.

The Times Co has been shedding assets in recent years in aneffort to focus resources around its flagship newspaper andaccompanying website. The Times Co once owned TV and radiostations, magazines and stakes in cable networks such asDiscovery Times and sports teams including baseball's Boston RedSox.

In December, the Times Co agreed to sell 16 regionalnewspapers in a deal valued at roughly $145 million.

The company still owns the Boston Globe, InternationalHerald Tribune, and Worcester Telegram & Gazette newspapers. Butin a report issued Monday, Barclays Capital said it expects thecompany "to sell other non core assets and the New England MediaGroup, which is primarily composed of the Boston Globe," whichthe bank estimates could generate between $100 million and $200million. (Reporting By Peter Lauria and Jennifer Saba; Editing by TimDobbyn)

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