As co-founder of SocialMedia I am clearly bullish on the value of Facebook applications as real media properties. That being said, I lived through the late 90's bubble with a front row seat as a Venture Capitalist at Flatiron Partners and try to be careful to keep my feet on the ground.
One thing that is super clear to me, however, is that Langley Steinert (Co-Founder of TripAdvisor) and the rest of the IAC M&A team are *not* dummies. In fact, they are careful, analytical and value-oriented. If they indeed paid this much for Where I've Been, then they clearly see something that could be worth far in excess of what they paid.
Online Travel was the first E-Commerce category to make total sense online as a self-sustaining business. It makes perfect sense, and is extremely promising, that this was the first acquisition of note on the new F8 platform.
Todd Sawicki
· 2 years ago
As I discuss on my blog (link: http://tinyurl.com/3yhkdx) - compared to other formers of customer acquisition or lead gen online $1.30 per user isn't so insane for a commercially related app like Where I've Been is travel as Seth above notes.
Commerce-related content has a lot of value and I think we'll see more of there types of acquisitions as web 2.0 forms user acquisition. In essense Trip Advisor outsourced their viral marketing to Craig.
In ways the app or widget becomes an ad, but since there's an opt-in involved hopefully a lot more acceptable to users then other forms of marketing.
$1.30 per user isnt bad at all. Google paid $40 per user for YouTube, and it could easily be said that users could easily switch to a rival video service.
DavidG
· 2 years ago
I'm not going to try justify the $3M ... but I do question your analysis here, Pete;
1) Switching costs are 99% of what they would be for an independant site. Users would still have to migrate their travel data. The login is the least of the switching cost. 2) Marketing costs are 1% of what they'd be for an independant site - (yes, I'm most probably exaggerating - but Facebook is the state of the art of word of mouth marketing and the "youth" of this App is proof of that. 3)Development costs are also a fraction of what it would cost to copy this App off of facebook. 4) Monetization is not a challenge for TA/Expedia - marketing is - hence this play. This App doesn't need to earn a cent on facebook to pay for itself. Which explains why we're going to see (a lot?) more of these deals.
d
Brian
· 2 years ago
i too was taken aback at first by the size of the deal, but i've seen way more money dumped into much less popular sites outside of facebook in the form of venture money.
this is a great play for tripadvisor, they have great ties to the travel booking market, and this provides them with data on 2million+ users who are potentially future long term customers of expedia, etc. they now know where all these people want to go, and where their friends want to go...
All Comments
Not only does it seem high, but I'd think they'll start losing a lot of users as TripAdvisor tries to recoup that investment.
Still-- awesome in a lot of ways.
One thing that is super clear to me, however, is that Langley Steinert (Co-Founder of TripAdvisor) and the rest of the IAC M&A team are *not* dummies. In fact, they are careful, analytical and value-oriented. If they indeed paid this much for Where I've Been, then they clearly see something that could be worth far in excess of what they paid.
Online Travel was the first E-Commerce category to make total sense online as a self-sustaining business. It makes perfect sense, and is extremely promising, that this was the first acquisition of note on the new F8 platform.
Commerce-related content has a lot of value and I think we'll see more of there types of acquisitions as web 2.0 forms user acquisition. In essense Trip Advisor outsourced their viral marketing to Craig.
In ways the app or widget becomes an ad, but since there's an opt-in involved hopefully a lot more acceptable to users then other forms of marketing.
MyZine.com
Share Video Audios & Photos
1) Switching costs are 99% of what they would be for an independant site. Users would still have to migrate their travel data. The login is the least of the switching cost.
2) Marketing costs are 1% of what they'd be for an independant site - (yes, I'm most probably exaggerating - but Facebook is the state of the art of word of mouth marketing and the "youth" of this App is proof of that.
3)Development costs are also a fraction of what it would cost to copy this App off of facebook.
4) Monetization is not a challenge for TA/Expedia - marketing is - hence this play. This App doesn't need to earn a cent on facebook to pay for itself. Which explains why we're going to see (a lot?) more of these deals.
d
this is a great play for tripadvisor, they have great ties to the travel booking market, and this provides them with data on 2million+ users who are potentially future long term customers of expedia, etc. they now know where all these people want to go, and where their friends want to go...