Ask Sponsored Listings, a division of Ask.com (itself a subsidiary to IAC) has acquired Sendori, a startup that introduced interesting advertising exchange technology about two years ago that enabled advertisers to purchase direct navigation traffic generated by top tier domain names, bypassing PPC advertising providers like Google and Yahoo when it comes to monetizing parked domains.
Sendori developed the technology, dubbed PureLeads and patent-pending, to enable both search advertisers and domain owners to benefit from typed-in domain traffic based on the highest auction bids. With rates for PPC (Pay-per-click) dramatically dropping the past few months, Sendori was quickly becoming a nice alternative for domain name owners who traditionally looked no further than the usual suspects offering PPC advertising deals.
Seems like a good match with Ask Sponsored Listings, an Ask.com unit which focuses on keyword targeted advertising on a rather large (+100) network of sites including properties like Match.com, TicketMaster, Ask.com, Evite, CitySearch, CNet, etc. Ask.com has also actively been purchasing valuable domain names and websites like Dictionary.com, Reference.com and Thesaurus.com. Sendori’s client roster includes names like Netflix, GEICO, Hewlett-Packard and other familiar brands.
The terms of the acquisition were not disclosed, but we suspect Sendori got a good deal as its model was clearly working: the company said it was providing 130,000 advertisers 33 million page views per month from direct navigation traffic at the time of the acquisition. From the 11 employees (including contractors), 10 will make the move over to IAC.
Update: per commenter Satanish and BusinessWeek, we’ve learned that Ask.com paid a decent $25 million for Sendori.
The startup had raised only $800,000 in Series A financing, from Baseline Ventures, First Round Capital, Maples Investments and Felicis Ventures.
(Source: DNJournal)
will see where this goes to….
ask has been in a hole for years now. anything they do is a good thing. it shows signs of life. they probably think they are buying adsense for domains and now they are gonna syndicate like Goo. congradulations to the founders.
Much better way to spend money compared to $100 million “algorithm” campaign.
Ask missed the boat on CNET. Would have been a major gamble but the domain portfolio could have been spun off from the major portals. Sold off the other units to CBS. With the CNET domain portfolio this deal would have made a lot more sense. We’ll see what kind of revenue share they’re going to work out now. I think Sendori was cutting sweet heart deals only to gain market share.
Go BLUE! Go Ofer! Good job.
Ofer is a burning hunk of Israeli man-meat.
Robin, any idea how much Ask shelled out? Thanks for this post.
Haven’t a clue, been trying to find out.
Ask is known to be looking only at bargain deals. They are pretty cheap.
IAC has a pretty ridiculous portfolio and a pretty clear strategy: buy stupid simple domain names that will inherently amass the long tail traffic.
Seems like it’s been working for them and this acquisition may be a mechanism by which they ramp up the revenue generated on their own properties (not just the ones sendori additionally covers).
Prescient move on Ask/IAC’s part.
Only other app I’d add would be Google/Microsoft demographic bidding; but stick demographic drop down boxes along the bottom of the query field so users could access Ask’s advertiser base directly.
Let’s estimate ASK deal size
In a big portfolio, each domain has ~80-100 page view per month. It means that the actual number of Sendori served domain is 300K – 500K per month
In average one domain generates ~$1-2 revenue per month. If Sendori get 10 to 20cents/domain per month their monthly revenue is between $30K to $100K/month. With 10 people they are break even, with no profit, so EBIDTA can not be used in company price valuation.
Today M&A price in ad space is 2x of revenue, may be 4x in outstanding situations. It means that ASK paid no more than $5M for Sendori in assumption that they generate $1.2M/year revenue. It also may be as low as $3M.
Finally, my estimation of the deal $3-5M.
Hope it would help
eMak60,
I think your estimates are way off base. Sendori isn’t bringing on domains that are only averaging 80 to 100 page views a month. I think in order to deal with big players, they’re not going to be able to take on any domain. I would think that 50 uniques a day (50 to 100 page views+ per day) would be the minimum. Additionally Sendori would be foolish to sell out for such a small amount when they’re almost the only such game in town.
We’re in a down economy, but no one is just going to sell out for the hell of it. Additionally they’ve raised nearly $1M and in order for the VC money to see any kind of return Sendori would have had to sign one of the worst VC deals in history.
I think that acquisition price was in the $30M range with an earn out option.
SinglePill.com,
I wish it would be true, but based on you thoughts Sendori was priced as MIVA and LookSmart together.
They have to be a 2M EBIDTA company to catch 30M valuation…
FYI: Recent Market valuation:
MIVA – 6-7M
LookSmart – 23-25M
Kowabunga – 9-10M
Announced 12/22/08
25.00M for Sendori, Inc.
Merger/Acquisition
IAC/InterActiveCorp. (NasdaqGS: IACI) agreed to acquire Sendori, Inc. for $25 million on December 22, 2008. Doug Ryder, Michael Andrescavage and Vianny Pichardo of O’Melveny & Myers LLP acted as legal advisors for IAC/InterActiveCorp.
IACI’s price was down 1.24% after the transaction was announced on 12/22/08.
Investor / Buyer
IAC/InterActiveCorp.
Seller
Felicis Ventures LLC
First Round Capital
Maples Investments
http://investin...p?symbol=IACI.O
Just noticed that I was right. : )
Awesome comment, though.