Peter Kafka

Recent Posts by Peter Kafka

The New York Times Gets a Bite of

Here’s a quick follow-up to News.Me, the sort-of mysterious social news project that the New York Times (NYT) is developing alongside Betaworks. An interesting deal point, really: As part of the partnership between the two companies, the Times has taken an equity stake in, the URL-shortening service that Betaworks built up and spun out last year.

That’s the second time the paper has picked up a piece of Betaworks in the last year. In March, the Times invested in the the New York-based holding company/incubator/investor itself, as part of a $20 million funding round alongside investors like AOL (AOL) and Intel (INTC).

Betaworks CEO John Borthwick wouldn’t disclose the value of the Times’ stake in, which has raised about $4 million so far. But the equity represents payment for the initial work the Times R&D group has put into the project, which they handed over to Betaworks this summer. Betaworks also paid out some cash as part of the transaction. No comment from the Times on the deal.

So what is News.Me, anyway? Borthwick won’t elaborate beyond what he told the, um, Times yesterday: It will be social and newsy and cool and it will start out as an app for Apple’s (AAPL) iPad when it debuts later this year.

But the connection is an important and obvious clue here: Since Web surfers use to shorten a gazillion links a year in order to pass them on–technically, it’s some 30 billion so far in 2010–the guys can mine all sorts of data about which Web surfers are interested in a certain story, and which stories a Web surfer’s friends may be paying attention to. You can connect the dots from there.

And assuming is a core part of News.Me, it makes it a little less likely that Betaworks will sell off anytime soon. But plenty of people think Betaworks has entertained thoughts of selling, though Borthwick insists that the company is not for sale. At one point Google was said to have kicked the tires on the service, and executives at Yahoo have thought hard about the service as well, sources say.