Sep 10, 2013 · 2 minutes

Yesterday’s news that social conversation platform Livefyre was acquiring social storytelling platform Storify may initially have seemed an odd deal. A startup acquiring a startup. A comments platform picking up a storytelling platform.

But really the deal was in good part about native ads.

Many people know Livefyre chiefly for its commenting system (see the comments section below this article, for instance). But the San Francisco-based company is these days more about helping brands grab a piece of the “social conversation” via its StreamHub platform, which competes with the likes of Mass Relevance and RebelMouse.

For instance, one of Livefyre’s key StreamHub products is its LiveMediaWall, which automatically gathers social media content in real-time based on location, keywords, and hashtags and displays it on a visual “wall.” With Storify, Livefyre gets a way to let people and brands curate stories from social media by hand, adding to its automated offering. That hand-picked option helps it compete against Mass Relevance, but it also opens up more advertising opportunities.

Livefyre CEO Jordan Kretchmer says brands are already using Storify to create content, and that Livefyre can amplify those pieces of content by syndicating them among its media partners. For instance, Chevy might create a Storify story about its new line of cars, bringing together tweets, YouTube videos, and Instagram photos supplemented with extra text and a headline. A publisher that uses Livefyre might then accept money to publish that piece on their websites. Livefyre’s technology is used by more than 450 publishers, Kretchmer says, many of which are looking for new forms of revenue from brands.

Such native ads might also take the form of ad units inserted into Storify stories created by other people, in a similar way to which promoted tweets appear in Twitter streams. One example could be an iPhone-related Instagram photo being inserted into a Storify story during, say, a certain Apple announcement.

The potential for native ads matched with Livefyre’s network of media partners helped seal the deal for Storify, which was approached by Kretchmer about the acquisition. (“This is definitely a ‘buy’ scenario,” Kretchmer says.) Co-founder Burt Herman says the acquisition unites Storify’s editorial sensibility with Livefyre’s business sensibility.

In March, Storify made its first serious foray into monetizing its product by launching an enterprise tool aimed at brands that wanted to tell stories through social media. Herman says the monetization approach was working, but it may be the case that it wasn’t working well enough.

That would be understandable. You can’t really describe Herman as a hard-nosed business type: He is, at heart, a journalist unused to selling. A former foreign correspondent for the Associated Press, he started Storify in 2009 after completing a one-year Knight Foundation fellowship at Stanford. On the other hand, his co-founder, Xavier Damman, is a tech guy.

“I guess we did realize maybe we should partner with somebody and figure something different out,” Herman says.

Because Livefyre was already doing six-figure deals with brands and media companies and is paying close attention to native ads – it has a vice president dedicated to the task – it made sense to join forces, says Herman.

And if Livefyre can make Storify a cash cow? All the better. Helping journalists get paid to do what they do best is what it’s all about, Herman says.

“This part about figuring out ways to help journalists make money is important,” he says. “To me that’s a bigger problem.”

[Illustration by Yau Hoong Tang]