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Yahoo bought content site Associated Content today for a reported $90 million. Neither company formally disclosed the price, but AllThingsD’s Kara Swisher pegs it at $90 million in cash and AdAge has it at $100 million.

Like AOL’s newly launched Seed and Demand Media, Associated Content farms out assignments to hundreds of thousands of writers and pays around $5 per post. The acquisition brings Yahoo content from 380,000 contributors that can help the web portal attract new users and provide it with more opportunities for ad sales. The move also makes Yahoo more competitive with AOL, which has engaged in a similar strategy under chief executive Tim Armstrong (who coincidentally is an investor in Associated Content).

Associated Content was founded in 2005 and has grown to attract more than 1.75 billion pageviews since it was founded. Associated Content’s site will remain the publishing destination for contributors, but its content will be widely distributed through Yahoo’s network.

New York-based Associated Content had snagged $6 million in a third round of funding last April from Softbank Capital, Canaan Partners and new AOL chief executive Tim Armstrong (its first benefactor when it was founded in 2005).

Associated Content says it will use its new financing to increase its numbers of users, publishers and advertisers. It raised $10 million in 2007 from these same backers, and $5.4 million from Softbank alone in 2006.


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