Newsvine Chief Executive Mike Davidson wasn't actively looking to sell his two-year-old Seattle social media startup. But when the second-largest Internet news outfit in the U.S. came knocking, the 32-year-old entrepreneur certainly took the meetings.

Those encounters have resulted in a positive financial payoff for Davidson, his five-person team and Second Avenue Partners, the Seattle venture capital firm that fronted most of the $1.5 million initial investment.

MSNBC Interactive News, a Microsoft and NBC joint venture with 27.3 million visitors in August, today is announcing that it has purchased Newsvine in a deal of undisclosed size. It is the first acquisition in MSNBC.com's 11-year history, one that President Charlie Tillinghast hopes will lead to additional news-sharing features on MSNBC and tap an audience of highly engaged news readers.

Newsvine will continue to operate as a separate business unit and brand under the direction of Davidson, with the team remaining in its Seattle offices.

Though it will operate autonomously, Tillinghast said that MSNBC will benefit from some of the technological innovations and community features that Newsvine brings to the table. Meanwhile, Davidson said that Newsvine will utilize MSNBC's technological resources, advertising capabilities and marketing muscle. For example, MSNBC could place a button on the bottom of stories to drive traffic to Newsvine -- a service that The New York Times introduced late last year.

"MSNBC is a brand that is known nationwide in a tremendous capacity by virtue of their own strong online brand and also their TV presence," said Davidson. "The prospect of using some of that brand identity to introduce more readers to Newsvine is an attractive thing for us."

MSNBC's Charlie Tillinghast

A social media site whose users comment on articles from mainstream media publications, write their own stories on specific topics and form online groups around select topics, Newsvine attracted 317,000 visitors in August. That was a 69 percent increase over the same period last year, according to comScore, though Davidson said the company's internal traffic numbers show monthly visitors nearing 1 million per month.

With MSNBC and Newsvine located just 15 miles apart, it was easy for the two companies to get comfortable with one another. In May, Davidson ran into employees from MSNBC at a seminar at the Seattle Post-Intelligencer building (where Newsvine is based.) Shortly thereafter, Davidson and Tillinghast met for dinner at the Waterfront restaurant near Newsvine's offices. The discussions continued throughout the summer, with Davidson -- who was entertaining offers from other companies -- saying that MSNBC was the "best fit" from a philosophical and geographical standpoint.

"Everything felt right," said Davidson, who co-founded Newsvine with former Walt Disney Internet Group employees in July 2005.

Because some of the MSNBC employees were already familiar with Newsvine and its community news functionality, Tillinghast said the idea came from the ranks.

"It was something that percolated up. It was not a top-down corporate decision," he said.

While details are still being sorted out, Tillinghast said there are several Newsvine features that could be attractive on MSNBC. Those include the ability to set up feedback forums at the end of news stories or using Newsvine's story recommendation tool to suggest alternative headlines to certain readers.

The Newsvine buyout is the latest in a string of acquisitions of small Seattle-area Internet startups by large media or technology companies. In the past four months, Nokia has gobbled up Redmond online video and photo sharing service Twango, E.W. Scripps has purchased Vashon Island recipe site Recipezaar and Meredith (publisher of Ladies Home Journal, Parents and other magazines) has taken out Bellevue health search engine Healia.

Geoff Entress, a principal at Madrona Venture Group, a Seattle venture capital firm, said big media companies are aggressively shopping for Web sites that attract high-quality traffic. Paying anywhere from $5 to $25 per unique user, Entress said the price goes up or down based on the engagement levels of the readership.

Entress did not know the value of the Newsvine acquisition, but he believed that the startup's audience -- because it actively comments on news articles, posts them to the site or directly covers news events -- would be considered valuable. Based on previous deals in the digital media arena, Entress doubted that Newsvine commanded more than $35 million. For example, AllRecipes.com -- a Seattle recipe site that was sold for $66 million last year to Reader's Digest Association -- was valued at about $11 per unique user.

Still, Entress -- who evaluated Newsvine as an investment opportunity in the early days of its formation -- said the sale appears to be a good outcome for some sharp entrepreneurs who smartly built an attractive Web service with very little capital.

"It is not a surprise to me because their traffic has been growing and they have been doing well," said Entress. "I wish we would have been an investor."

Davidson described the deal as a good one, adding that "nobody would have considered it if wasn't."

And he doesn't worry about moving from a six-person startup to a 220-person media behemoth.

"We come from big media roots -- ESPN, ABC News -- so the thought of joining on with a large organization like MSNBC is appealing to us," he said.

More from the Newsvine blog, MSNBC and The New York Times.