We got a tip earlier this evening that Hearst acquired New-York based UGO and will announce the deal tomorrow. It sounds like Forbes got a tip as well, and a better one: they’re saying the price should be around $100 million. UGO is a popular new media site that was founded in 1997 and, according to Forbes, is generating around $30 million/year in revenue.
They spring up in rumors often as a company that makes the rounds trying to sell itself, and a lot of companies have passed on them, at this price. The company has raised $82 million in capital.
Not much growth recently – total worldwide uniques to the site are just 11 million/month according to recent Comscore stats, up from 8.5 million a year ago.
1997 makes them a survivor of the Web 1.0 era – a real achievement for a
new-media company.
One can not help but wonder WHAT they could have become had they been fully developed and expanded.
They had an enormous head start over today’s popular Web 2.0 media destinations – just imagine what a giant they could have grown into during the past 10 years
Ditto, still in all a remarkable achievement.
How someone can use site like ugo.com is? Full of heavy graphics and videos from the beginning…
mike ,
it isn’t a lot $100M if they make $30M/year, isn’t it ?
i think that 1/3 growth in one year is quite enough. (was 20k, now almost 30k).
marc – it’s $30m in revenue, not in profit
Mike – any guesses as to why the low multiples on this acquisition? This is much, much lower than most of the other recent acquisitions we’ve seen.
Take a look at UGO.com and MTV.com side by side. They use the exact same structure. They even use the exact same nav-bar. The thing I’m trying to figure out is who copied who?
Interesting. It’s very interesting to see a tradtional publisher make a move like this. Finally. I think they all should have been making these kind of acquisitions a year and a half ago. I have thought this sector of media has tanked on online initiatives so far. It’s good to see somebody finally make a move.
Ugo looks cool – what a boys site, though, for sure.
I wonder what Hearst is going to do with it.
mike,
does there is a global rule for an acquisition? (profit)*2? *3? *4 ? *10? ….
Marc: Obviously not. YouTube, Flickr, Delicious, 95% of other “web 2.0″ companies don’t have any profits and still sell for millions.
My guess: some combination of profits, users, market and importance determine the price. YouTube for example was important to Google, had the users and basically cornered the user video market.
No way in hell they’re taking $30 mill in revenue. They have like a 4k Alexa. Someone got played….
Ryan, I assume they’ll be getting all the other websites in their network?
“Mike – any guesses as to why the low multiples on this acquisition? This is much, much lower than most of the other recent acquisitions we’ve seen.”
They have multiple years of revenue to show, surefire way to kill your valuation
thanks veritas
eh, Cavenger’s got better stuff than this (http://www.cavenger.com)