Will buying Zite make CNN better or Zite worse?

CNN announced Thursday that it has acquired iPad (s aapl) newsreader application Zite. Zite is a personalized content aggregator and delivery system for the Apple tablet, which dynamically changes the content it surfaces based on a user’s reading habits. CNN (s twx) seems to indicate that Zite will continue to operate as a separate app, but can it really avoid becoming just another spout for CNN content?

CNN Digital General Manager KC Estenson and Zite CEO Mark Johnson told me that it can and definitely will continue to operate independently without any noticeable effect on how it gathers or recommends content to users. That’s good news, but there are a number of other ramifications of this deal worth considering.

Initially attacked, but the appeal is clear

Zite was attacked by mainstream media outlets like the Washington Post (s wpo) and the Associated Press in March for grabbing content while also reformatting and republishing it within the app, sans advertisements. At the time, Mathew Ingram noted that this isn’t the right reaction; content producers should be looking at why there’s a need for Zite to begin with instead of demonizing the app. In other words, what’s so wrong with your own delivery method that people want to go find the same thing elsewhere?

CNN seems to have taken Mathew’s words at face value, and actually acquired one of the personalized news apps attracting the gaze of readers tired of busy websites and in-your-face digital marketing. It’s a move that makes good sense for a traditional media company working through the transition to new media.

Still, I asked Estenson about the reasoning behind the acquisition, and he told me that integration with CNN products isn’t actually a top priority for the network. The primary reason for CNN to acquire Zite, according to Estenson, is to provide it the support it needs to continue reaching audiences and pushing personalized content discovery to new heights. Estenson also notes that the buy gives CNN, which is based out of Atlanta, Ga., more of a foothold on the west coast, and a way to connect with the San Francisco development community, too.

Not the first

Personalized news is a relatively recent trend that extends the concept of RSS readers by adding a “smart” element based on making predictions about reader taste. CNN is smart to be pursuing it; the tech behind the app could help put its content in front of eyes that appreciate it with greater frequency and accuracy, which should in turn lead to more a more faithful audience. I asked Estenson about possible Zite integration into CNN products, and he said that although it’s definitely something the company wants to explore, we won’t see anything in shipping products for probably another 18 months at least.

Waiting and watching before plugging Zite tech into CNN products is probably a good idea. Consider the attempt by MSNBC (s cmcsa)(s ge) to accomplish something similar with its Newsvine acquisition in 2007. Newsvine was a community-sourced news site akin to Digg or Reddit, and though the site still exists, the partnership hasn’t really done much for either the profile of Newsvine or the new media chops of MSNBC. Rushing integration definitely isn’t a recipe for success.

More recently, AOL (s aol) tried a similar approach to what Zite accomplishes with its Editions app for the iPad. While it’s too soon to tell whether or not that effort’s been a success, I argued (and still maintain) that it lacks a lot of what makes category leader Flipboard so appealing, like frequent updates and formatting ideally suited to the platform. Zite should be able to avoid those pitfalls, however, since it comes to CNN as a fully formed product.

The competition

Speaking of Flipboard, it’s still the biggest player on the board, with lots of funding and a head start on the competition. CNN can put money behind Zite, but some might also be concerned that funding might circumscribe Zite’s ability to innovate. A big part of the appeal of independent newsreader apps is their very independence, after all, and arguments to the contrary aside, a wholly owned subsidiary will be perceived as having trouble maintaining that.

Both Estenson and Johnson claim any fears about Zite’s independence are unfounded, however. Johnson says the “same personalization algorithm that currently powers Zite will remain in place,” and it will continue to comb “hundreds of thousands of sources.” CNN won’t have a say in how those sources are chosen, and control over the Zite product will remain with the Zite team.

Overall, CNN seems to be treating this as a means to a seat at the personalized news delivery table, in a way that provides Zite with much-needed financial capital. If things work out as planned, Zite could then have the backing it needs to go toe to toe with Flipboard and push personalization further still. Let’s hope both Zite and CNN deliver.