Deutsche Bank is still out there trying to find a buyer for eBay’s StumbleUpon business, we’ve heard from new sources (we first reported on this on September 18). But there’s one problem: while eBay wants to unload the business, they aren’t willing to sell it for less than $75 million, the price they paid for it in May 2007.
StumbleUpon’s 2008 revenues are estimated to be $6 million or so.
eBay has denied the sale attempt, but there are too many people who’ve seen the deal book and have heard Deutsche Bank’s pitch. The big question is, will it sell?
As we wrote in our last post, StumbleUpon’s traffic has stagnated or declined, depending on which analytics service you look at. StumbleUpon says usage is growing at a fast clip, despite website traffic, because most users never visit the site after downloading the toolbar.
Ok, but StumbleUpon didn’t mind pointing to usage stats in the early days before the sale to eBay. And the stats are likely irrelevant anyway, since StumbleUpon recently deprioritized the toolbar to let users “stumble” to new sites directly from the website. Expect traffic to grow quickly with that change.
Update: Yet another source who’s been pitched says Ebay may consider a $50 million deal. I’m starting to feel like I should get a finders fee.
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How can I get my hands on this pitch book?
oh trust me, I’m trying. And the second I have it, all of you will, too.
What are the revenues? Given the economy, there is a lot more focus on revenues TODAY.
revenues? come on. Pay attention.
Exactly.
another overrated acquisition bites the dust.
I think unless they put it up for auction on eBay itself, their only option is to walk it into Barry Diller’s office at IAC who will probably pay $40M for it and hedge that the future of the new in-browser StumbleUpon will jump start traffic and revenue from the flatline. Barry could use a new business, his stock was down another 6% yesterday.
“The big question is, will it sell?” No, I think the big question is, is it true?? Ebay denies it and you have “sources” who tell you it’s true… Humm, I’m going to have to go with eBay on this one…
Good idea. These rumors never pan out anyway.
24 /7 Micheal - love your dedication
I still never saw the value in StumbleUpon just abunch of random, untargeted websites to click through and waste time. Plus stumble upon traffic doesn’t convert for anything.
ebay playing hardball
wow..
$75 millions is a bit much now - there are many similar type of services out there today. StumbleUpon was the “first” few years back (new shiny toy) - now, geeks figure out how to build it for much less and better. I would say yes, it will sell, but for much less.
I will say this about Stumble Upon…
Sure eBay probably overpaid. It doesn’t really provide any synergies or possess a great business model etc. However, from a publisher’s standpoint, Stumble Upon is very valuable. The traffic converts well and the users typically generate 5x the traffic that Digg or Reddit can provide. The best part - you can manage promotional campaigns free of charge if you know what you are doing. My two cents.
And it’s people like you that are ruining the experience for all the non SEO/Marketers/bottom feeders on SU.
StumbleUpon was a nice place to waste down time, get some -quality- pages and enjoy themselves. Now? Every other page is a copypasta blog with completely stolen content self submitted by the site’s owner.
Spam rings and stumble exchange rings run rampant.
Now?
SU has become an SEO haven.
A spammer free for all.
An avalanche of marketing and self promotion.
It’s become a cesspool.
I’ve been on SU since the beginning and as soon as I find - or have someone code - something that’s similar to SU, I’m leaving.
And I’ll be sure to take take as many of my my 5000+ fans with me as I can.
Michael: who do you see as potential buyers? Would you buy it if you could?
NICE DUDE TELLME MORE ABOUT THAT
Who in the hell made all these acquisitions in Ebay? Skype and StumbleUpon, both companies which made very little sense for Ebay in the first place are coming back to bite them in the rear. Ebay, your a retailer, don’t buy companies without obvious synergies.
That’s a good question. And I happened to ’stumble upon’ one of those responsible: Michael Reining (http://www.mindvalley.com/about-us).
@Asad Akbar:
eBay is not a retailer, eBay owns no physical product, unlike Amazon, eBay is a venue. Your statement is like calling the owner of a shopping center a retail business, he, like eBay is a facilitator. If he builds something better suited (for example) to a sailing club it will not do well as a grocery store.
There is a contractual obligation for both parties; eBay to provide a usable facility with buyers waiting to spend money plus services to the sellers to enable transactions. Sellers provide inventory and customer service to the buyers while paying fees to eBay for their service.
Unfortunately eBay has lost sight of who the customer is, the sellers who pay fees to use the venue or facility. In any marketplace the merchant who treats his customers with contempt will eventually have less and less customers to abuse and that is what is happening to eBay.
The big question is not to sell or not to sell? The big question is how do you monetize something with so much traffic, and still keep your users around.
why in the world are they using Deutsche Bank when this can all be done in a way which the buyer can say “i got it on ebay” when its done.
Never sell in a slump.
turnover COULD be:
6 mln users
asume: 2 stumbles a day on average
12 mln website views a day
max advertisement 5%
600.000 advertisement views times $ 0,05 (price per view at this moment) = $ 30.000 a day
360 X 30.000 = 11 mln turnover a year (I think it is less)
75 mln = 7 times turnover
Ebay was just trying to buy anything that sounded cool / the next big thing at the time.
Why don’t they sell in on ebay itself
auction it man! hahahaaa
LOL @ Neal
I have used StumbleUpon for campaigns and it has helped me decide which layout is better for a page, etc. thanks to the user ratings.
SU has become my de-facto focus group and I would pay more than the 5 cents/view.
Unfortunately, the SU users don’t come back, but I feel that is more a flaw in our venture than SU.
Getting stumbled by some people has generated massive traffic jumps and it should be up to the site operators to figure out how to monetize that traffic (outside of the obvious ads).
I don’t think it will sell right now with this economic climate and I never understood why eBay bought it. Atleast with Skype I could see sellers and buyers calling to discuss the product.
But keep in mind that more and more Stumblers are using addons that won’t allow your ads to work. I personally use 5 such add ons and urge my rather large fanbase to follow suit. Which, they in turn tell to their fanbases.
Quite honestly, stumblers don’t like to be directed to sites that are on SU simply to drive traffic. They “thumb” things down and it gets drowned in the rest of the sea of crappy content that is plaguing Stumble, right where it belongs. We also flag these people as spammers and report them.
People who complain about not getting repeat traffic are the ones who don’t have anything worth reading. Crappy content = crappy traffic.
Yes more stumblers may be using add-ons that prevent the ads to work but I only pay for the ones that work and there are always people who don’t use add-ons.
If SU can grow its base faster than the people take to the add-on then it will still have a large user base ready for advertising.
Also, my comment clearly indicated that “Unfortunately, the SU users don’t come back, but I feel that is more a flaw in our venture than SU.”
Content alone does not determine return visits. Presentation of content, ease of finding content, frequency of updates AND targeting the right audience all play a role.
Target too wide an audience and naturally only some will return. SU could add even more targeting options.
I’m keen to buy at the asking price of USD 75m. Being an American company, do they accept purchase on credit? LOL.
Oh wait, how much was Kevin Rose asking for Digg again?
IMHO, I think StumbleUpon doesn’t have as large a userbase nor anything close to Digg - in fact, I would find the traffic there slightly *SLOWER* than any other social “stumbling” site…
My 2 cents. Haha.
- Kevan (Free-iPhone-3G-Apps.com)
Time for some new metrics in the new economy. Stuff like profit and loss.
Advertisting isn’t paying the bills, and adverts are a cornerstone of the ‘get huge fast with free stuff’ business model.
If the economy does tank, we’ll see a clearing of the wheat from the chaff.
Isn’t a right time for sale.
If Ebay cannot sell GambleUpon or sell for less than $75 M, that would the first indication that Web 2.0 Bubble is bursting. Just the other day, Revolution Health was valued at $100 M after spending more than $200 M. All these are warning signs.
and speaking of rumors, is it true that you guys are up for sale? been hearing that a lot lately
They should take as little as $50 million.
Well if the paid $75 million and there hasn’t been much growth then they should take less. This is very crude math but I’m strickly speaking on a multiple basis. In this environment, you have have to assume multiple contraction but I could be wrong.
Does StumbleUpon classified as Toxic Asset in which qualifies for part of $700 B bailout fund?
stumbleupon = deadpool
Why are they even selling su ? I personally find the site to be addictive;
If they can make it more social, they still have a very good chance of surviving
It was more social and fun prior to the sale to eBay.
The content was better.
The people were better.
You didn’t have spammers, marketers or self promoting bloggers every where you turned.
I’ve been on SU for a long, long time and it’s degraded so much.
It’s now a place for thieves, scam artists and pyramid schemes.
I think its really a great site. Its very addictive and you can really discover new cool sites. But perhaps its not the right time for a sale.
I’ll buy it. For one dollar.
StumbleUpon is mostly a waste of time and a confusing model for social web. It was fun around 2003.
You can say that again.
Revenue is 6 Million.
Hence, 5Xrevenue= 30 Million. This is how much it os worth!
Revenue is 6 Million.
Hence, 5 X Revenue = 30 Million.
So, this is how much it is worth!
Stumbleupon is heavily undermarketed and hard to monetise. Unless they implement a way to monetise it, besides the web toolbar, they’ve got the traffic but no drive.
Looks like eBay fails again with another investment..
“Not less than $75 million,” huh? I got three words for you, eBay:
RESERVE NOT MET.
other stumbleupon news-http://www.blogtogreat.com/2008/10/stumbleupon-to.html
What is the development in revenue last years? what would be revenue in 2012? Isn’t this like Netscpape, an inventor loosing there position and never recover?
StumbleUpon could have been great, had eBay marketed it properly. A channel experience for less technically inclined users - instead, they left it as a neutered social bookmarking site with an incredibly annoying process.
SU -was- great until eBay took it over.
Then it started a downward spiral and it just keeps going down.
The only annoying process is that all the jackals have moved in and have mucked the place up by crapping all over where people come to enjoy themselves.
Also, the whole “no toolbar” thing… it’s going to be the end of SU.
I’ve seen postings on sites like Mixx and other spammer hangouts that have already started their rollouts on saturating Stumble with their sub par content and copypasta.
David Mullings - October 6th, 2008 at 9:12 am PDT
Yes more stumblers may be using add-ons that prevent the ads to work but I only pay for the ones that work and there are always people who don’t use add-ons.
If SU can grow its base faster than the people take to the add-on then it will still have a large user base ready for advertising.
You’d be surprised how many people have started putting on the add ons.
When you’ve got “Super Users” with a large fan base you’re going to see a reduction of revenue. All it takes is a little organization on the parts of the users and you’ll see hardly any income from your SU pages.
You realize, of course, that there are forums for just this purpose.
Don’t be surprised if you see a “call to action” on it in coming months.
Also, my comment clearly indicated that “Unfortunately, the SU users don’t come back, but I feel that is more a flaw in our venture than SU.”
Content alone does not determine return visits. Presentation of content, ease of finding content, frequency of updates AND targeting the right audience all play a role.
Target too wide an audience and naturally only some will return. SU could add even more targeting options.
I know that you stated that it was a flaw in your “venture”, I can read for content.
I was reinforcing the point that content is important.
Also, I don’t know why you don’t think that return visits are based on content.
I can assure you that I will not revisit a site that offers fluff, stolen content, poorly written trite…etc. I can also assure you there is a rapidly growing number of users who feel the same.
Say you’re at a get together and are sitting in a circle.
One person reaches down and picks up their fancy looking handbag, which is full of manure.
They pass it around the circle and all the way back to the originator.
Then he tries to pass it around again, but this time… no one will take it.
Why?
Because even though the handbag was nice to look at, it was filled with stinky crap. You can dress it up, but it’s still going to stink.
P.S.
Nobody wants to be subjected to stinky crap.
Put that in your “venture”.