Bustle acquires Elite Daily from Daily Mail and rebrands to Bustle Digital Group

• Bustle has acquired Elite Daily, a millennial site, from Daily Mail.
• The deal was a mix of cash and stock. The exact amount was undisclosed, but seems to be less than the ~$40 million Daily Mail paid for Elite Daily in 2015.
• In late 2016, Daily Mail wrote off its entire acquisition of Elite Daily, citing poor performance. But Bustle's CEO thinks the property is still valuable, particularly because of its video and social media efforts.
• Bustle is changing the name of its parent company to Bustle Digital Group. Combined, its three properties will have a readership of about 80 million monthly uniques.

Bustle, a digital media company that caters to millennial women, has acquired Elite Daily from Daily Mail.

Bustle now owns three web properties, Bustle, Elite Daily and young mom site Romper, and is changing the name of its parent company to Bustle Digital Group (BDG). Combined, Bustle founder and CEO Bryan Goldberg says BDG will reach about 80 million monthly uniques per Google Analytics.

Bustle, says Goldberg, has about 50 million readers, while Romper is nearing 10 million. Elite Daily, a general interest site similar to Bustle, will add another 20 million or so.

Bustle.com's readership appears to be stagnant; the site boasted 45 million monthly uniques in October 2015, the same month it launched Romper. And Elite Daily's 20 million is down significantly from the teen site's high a few years ago.

Bustle says most of its growth over the past few years has been on other platforms, like Instagram, where its audience grew 600% in 2016 and it's making "significant revenue" from Stories. Bustle expects to bolster those cross-platform efforts by adding Elite Daily.

Another man's treasure

Goldberg, who previously founded sports site Bleacher Report and launched Bustle in 2013, believes that he has acquired a "true trophy" in Elite Daily, and says he has wanted to own it for a long time.

"I've been working in this market for four years now," Goldberg said. "Elite Daily, Refinery29 and Bustle are what I hear when I ask [our users] what they read." Elite Daily's audience skews slightly younger than Bustle's, with core readers between the ages of 18 and 24.

But Elite Daily has had a turbulent few years; both its audience and value have tanked.

Daily Mail purchased Elite Daily for about $40 million in 2015. At the time of the sale, Elite Daily had about 40 million monthly unique visitors. While under its new owner, the media landscape changed significantly - including algorithms on social media platforms. A lot of the viral traffic Elite Daily enjoyed from Facebook disappeared, and now its on-site readership is half of what it was.

Daily Mail recently wrote off its entire purchase of Elite Daily, Recode's Peter Kafka reported, citing "poor performance." Both of Elite Daily's founders have moved on from the company.

When we told Goldberg he blew millions on a dead company, he said he didn't care.

"This property is valuable, I know it's valuable," Goldberg said in a call with Business Insider. "If there's one person who doesn't care what the press thinks, it's me."

He added: "I can't speak to Elite Daily's past, but this is a site that has always been extremely valuable in my estimation...It is a great property, and we're going to show everyone how great it is."

A video and social boost

Goldberg's plans for Elite Daily may have more to do with boosting Bustle's video and social media efforts than anything else. Elite Daily produces original video content that generates about 60 million monthly views, Goldberg says, while Bustle's early video efforts generate about 10 million. Additionally, he says Elite Daily's brand has "off the charts" social engagement, with about 6 million Facebook and Instagram followers.

"This deal is very much about us doubling-down on platform revenue," Goldberg said. He estimates BDG will double its video inventory through the acquisition.

It's unclear who will run Elite Daily under BDG, or exactly how the teams will be integrated. "We are endeavoring to keep as many team members as we can," Goldberg said.

Goldberg struck up conversations with Daily Mail a few weeks ago. Jon Steinberg, who was formerly US CEO of Daily Mail, oversaw the purchase of Elite Daily in 2015 and now sits on Bustle's board. Steinberg recused himself from Bustle's and Daily Mail's acquisition talks. While the acquisition price is not being disclosed, it was implied that BDG paid less than Daily Mail did for the property.The deal was a mix of cash and stock.

Bustle has raised $50.5 million from investors and said its recent $12 million round would be used for acquisitions. It reportedly generated about $30 million in 2016 revenue.