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News Ltd’s Kidspot acquisition highlights parent market growth

Tuesday, 28 June 2011 | By Michelle Hammond
Media conglomerate News Limited has acquired online parenting start-up Kidspot, and its related companies, for an undisclosed sum.

 

Kidspot, a portfolio of online and offline services aimed at women and mothers, was launched in 2005 by chief executive Katie May.

 

News Limited would not say how much it paid for Kidspot, but reports suggest it could be close to $50 million. It is understood other parties, including Fairfax, considered Kidspot during the sale process.

 

News Limited will acquire 100% of Kidspot.com.au, which also operates Kidspot.co.nz, Birth.com.au, advertising portfolios The Spot and SheSpot, Mums Say, and Baby and Kids Market. The deal is expected to be complete on July 4.

 

Since April 2006, Kidspot has been recognised as a market leader in the parenting category, attracting more than 1.3 million unique visitors every month.

 

May, a former marketing director of employment website Seek, has agreed to continue running the company for at least 12 months.

 

“I will run the business as a chief executive – there are certainly no plans for integration,” May says.

 

“Kidspot will continue on the same path of genuine engagement and connection that we have followed the past six years, though now at a faster clip with News behind us.”

 

“Our [users] will still access Kidspot at the same URL but can expect even more touch points, more reasons to engage and more connections.”

 

May believes the deal will prove extremely attractive to advertisers as Kidspot will be “backed by News’ massive scale and infrastructure”.

 

News Limited chief executive John Hartigan described the acquisition as “transformational”.

 

“The fact that Kidspot alone accounts for around 10% of the total online FMCG advertising market – the fastest growing online display category – shows the strength and potential of the business,” Hartigan says.

 

“This deal makes us the leading player in the highly valuable online parenting market... Katie and her team have established a highly original and valuable online property, attracting and engaging with the majority of mums in every market they serve.”

 

The acquisition highlights the increasing demand for child-focused services, particularly among working parents which are typically cashed-up, yet time-poor.

 

A recent report by Franchise Business Review, which surveyed 752 child-focused franchisees, found parents continue to seek new options to stimulate and educate their children.

 

“Be it through daycare or after-school programs, toy stores or special events – it’s safe to say there will always be... opportunities within this sector,” the report states.

 

This prediction is in line with recent findings from market research company IBISWorld, which identifies child-focused services as a standout sector for future growth.

 

IBISWorld analyst Ian MacGowan says Australian parents will gradually become more inclined to pay for things such as tutoring as work demands prevent them from helping their children with their homework.