Seattle based WhitePages.com, a people search and background information site founded in 1997 by Alex Algard, will announce their pending acquisition of VoIP and widget startup Snapvine later today. The acquisition price is not being disclosed, but is rumored to be around $20 million, all cash.
This deal with SnapVine comes after WhitePages walked away from a Jangl acquisition (a competitor to Snapvine) last month.
So what is a people search company going to do with a VoIP/widget startup?
Algard says they want to make the fast growing WhitePages more relevant to users, and Snapvine can help them do that. Today the company is a phone and people directory that people use, ultimately, to connect to others that they’ve lost touch with. Today WhitePages includes publicly available phone numbers for most of the 180 million people in their database – about 80% of the adult U.S. population.
They’ll integrate Snapvine into search results, letting people claim their information and replace their phone number with a voicemail box from Snapvine, and/or a click-to-call button that lets people call them without giving out their phone number. Their hope is that as people do searches on themselves (about half of U.S. adults do this) and find their information listed on WhitePages.com, they’ll claim the profile and add Snapvine functionality.
Eventually Algard says they’ll integrate additional information into search results as well, such as social network links. Look out, Wink, Spock, etc.
That may or may not be a strategy that will work, but WhitePages has the resources to give it a try. The company was founded in Algard’s Stanford dorm room when he purchased the domain name for just $900 in 1996. The company has since grown to over $70 million in annual revenue and is rumored to be very profitable. In 2005 the company raised a whopping $45 million round of financing as well, adding to their war chest.
This $20 million deal isn’t the outcome Snapvine and it’s investors were looking for. The company has raised $12 million in funding, and the last round, just eight months ago, was rumored to value the company at $50 million or more. And while the Snapvine widget is still extremely popular on MySpace and other social networks, their traffic trends suggest the company is going nowhere fast. This deal, at least, returns capital to investors and lets the technology live on.
Look for a possible 2009 IPO for WhitePages based on the strength of their financials. Perhaps if Intelius, a competitor, gets called on their questionable revenue growth, WhitePages will take its place in the IPO queue.
Who would have known that something so simple was worth so much!
I would not have predicted M&A between social network widgets and white pages. If they can make this work it is probably a good deal however.
Anything that leads to better privacy is good.
Does anyone know what the Whitepages.com valuation was?
Congratulations. The snapvine guys are smart to go with cash deal.
I’m interested to know how they were valued at $50mil?
if the company wasn’t going anywhere, $20 million is a lot of money and the investors almost doubled their money. seems like a successful outcome to me.
At a $50 million valuation, the investors did not almost double their money. 12/50 is just under 25% (in other words, investing 12 million dollars into a company valued at 50 million will only get you 25% of the company). 25% of $20M is $5M. This doesn’t take into account preferred vs. common stock, but still.
Mmm… Our service Sitofono (www.sitofono.com) delivers high quality click to call and voicemail to directories (among those the italian Yellow and White pages, the 4th biggest worldwide) at an annual cost that is a very, very, very tiny percentage of what they paid. I hope they have a clear idea on how to quickly get their ROI.
Congratulations to Joe and his team and Snapvine.
Wow. That company was a sinking ship. It looks like they got very lucky to get bought for less than half of what they “thought” they were worth. I bet they had some board and investor pressure to take what money they could and run fast.
I know both founders and both companies quite well. Imho, this is a smart merger. The Snapvine team will fit well with the team at Whitepages.com The Snapvine technical competence in VoIP, SMS, Mobile, etc is of particularly great value to Whitepages. And it’s an excellent opportunity for Alex and Joe to combine their assets & talents into creating more consumer value than either company could alone.
First, congrats to the guys at Snapvine, but I agree with Peter Urban (post 5) great job on taking cash.
Whitepages.com has a bad and often documented rep for being pretty slimey with spyware. See: http://msmvps.c...22/1129296.aspx
I have a hard time believing in this company or their model. Everytime you go to their site you get spammed with ads.
Also, most of their traffic seems to go to USSearch, which would mean to me that must be a super big chunck of their revenue. I point this out becase techcrunch highlighted Intelius’ business model and USSearch’s is the exact same. So if Intelius is forced to change their model so will USSearch which will flow down to Whitepages.com.
Lastly, if you look at the metrics that InfoSpace sold their directory services company to Idearc for, Whitepages does not make for an exciting IPO.
Congrats on the sales, bigger contrats on the cash!
The “bad and often documented rep” URL points to a single case and has the following comment:
Thank you very much for your help in finding our nasty malware highjacker. We have pulled this ad immediately. Whitepages.com does not knowingly run these types of advertisers. We apologize for any inconvenience this issue has caused everyone.
Eric Meixner
Manager of Ad Operations
Whitepages.com, Inc.
So that seems like a red herring (at best) and I don’t see anything else online about these guys and malware.
Yep,
Whitepages.com had a malware issue last summer with two European advertisers. We are very grateful to the spyware sucks web site for helping us find the offenders. We have instituted processes that have helped us (knock on wood) keep spyware ads off of our sites since then.
As for the USSearch issue: Our advertising revenue is diversified across hundreds of clients each month and no one client is a “… super big chunk” of our revenue.
Eric Meixner
Sr. Manager of Ad Operations
Whitepages.com, Inc.
Glad the issue is fixed, I still find the site to look like someone puked ads all over it, but just my opinion.
As for whitepages.com’s other advertisers, I looked on comscore and hitwise and it says (correctly or not I don’t know) that almost 2/3rd of their downstream traffic goes to USSearch. If this is true, you’re either not admitting your numbers (hey you’re private you don’t have to) or you’re ripping off your other advertisers.
Regardless – I think the overall directory whitepages space is dead. More people are shifting to only cell phone, whitepages.com does not have these numbers in any reliable way thus the need for their site is going to dry up. I think there are some interesting sites out there playing in this space like Wink, Spock, etc. Whitepages.com – not one of them.
There’s a reason why the Snapvine guys took cash and no stock! They probably agree with me! If you believe in a company and the direction it is going, wouldn’t you take stock?
Hey Mike,
How do you think people will react to adding their online places to their Whitepages listings?
Would they freak out?
Shanthala
Good question Shanthala – I am familiar with what they are doing at whitepages.com and they have taken the “freak-out” concern seriously. this is precisely why they bought snapvine – whitepages.com becomes the message broker while protecting the privacy of the message recipient. I think this has the potential to be very powerful.
Chris
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