UrbanSpoon, a restaurant recommendation service, started out with a simple plan. It was three former Jobster employees, Ethan Lowry, Adam Doppelt and Patrick O’Donnell who set out to see if they could build a company in today’s world without needing any traditional outside investments. Today, they can safely say they succeeded — big time. IAC, the Internet giant, has just bought the completely self-funded company.
Terms of the deal were not disclosed, but I hear that it’s definitely worth something in the millions of dollars range. And it had to be, because UrbanSpoon was perfectly happy continuing to grow its business on its own, as it was already fairly profitable, Lowry tells me. But IAC, came in with “an offer we couldn’t refuse,” according to Lowry. He would only elaborate that, “we’re very happy with the deal.”
UrbanSpoon first popped up on IAC’s map when it began pulling in Citysearch reviews to serve up to customers. IAC was impressed with the local audiences UrbanSpoon was able to attract, Lowry says. The two sides had been talking informally on and off starting in the second half of last year. Coincidentally, this was right around the time when the iPhone 3G and Apple’s App Store launched. I mention those because they were really the catalysts that catapulted UrbanSpoon into the spotlight.
Actually, UrbanSpoon was one of the first iPhone 3G-specific apps I ever looked at because I thought it made interesting use of the device’s GPS chip. When you start up the app, it locates you via GPS, then you shake the phone and it comes up with a random restaurant near you. You can tailor these searches to be more or less random, but it’s so simple and turns indecision into a form of entertainment and discovery. Others clearly agreed as UrbanSpoon was a mainstay in top downloads area of the App Store, and Apple even thought enough of it to use in one of its commercials.
Lowry and the rest of the team will stay intact with the move to IAC, and will keep UrbanSpoon based in Seattle. They still have plenty of things in the pipeline, including updates to the iPhone app, but given IAC’s wide range of properties from the aforementioned Citysearch, to Ask.com, to Match.com to Evite, there are a lot of potential new things that UrbanSpoon can delve into now.
UrbanSpoon is a great application, last night I was searching on what to eat in my local area and it provided everything I needed.
They just need to introduce a setting – what your partner would want to eat during football – as although I made many suggestions it didn’t recommend anything to her satisfaction.
Next time I’m going to a bar to watch the match!
Stanza and now Urbanspoon. Has the acquisition spree begun?
Think so, is iFart next?
If so, then I will have to get back into iPhone dev work.
Blimp Pilots maybe or maybe Smule…
I personally think a lot can be done on both their hit apps
Looks like a perfect fit amongst IAC’s properties. Guess they can thank Apple for that huge promotion w/n their commercials.
Bravo!
This is really cool…
Congrats guys. Hope to do the same thing some time soon.
And in this economy, Why Not?
I think an unintended consequence of the recession will be more entrepreneurs making the jump from employee to small business owner without seeking outside investment.
Especially when social promotion tools like YouTube Channels (yes, I have one too: http://www.yout...TubeWatercooler) are so easily accessible and effective.
The best part seems to be that you get to keep ALL that buyout money with no outside investors!
wow, congrats. i love urban spoon as well, it’s a great app. i recently found another food related site that i love too, it was featured in the ny post last week: http://www.imma...infatuation.com – that’s my current new obsession. i think these guys are hysterical.
Rob Angel continues his prep to crush Jeremy Stoppleman in a cage match.
I’ve never used it, but can someone explain this:
“UrbanSpoon first popped up on IAC’s map when it began pulling in Citysearch reviews to serve up to customers.”
I didn’t think it was okay to use other sites’ reviews in your own review-delivering app. Is there something different about Citysearch?
Its all in the execution. UrbanSpoon only displays a small portion of the scraped content and provides an external link to the full content. I don’t think this technically falls under fair use, but the link love is enough for most people to allow the practice. Essentially, UrbanSpoon is a review gateway and link aggregator. There are UGC reviews on the site, but the majority are as described above.
Thanks for the reply. It seems like a smart strategy. I have a couple app ideas that would rely somewhat on someone else’s content, and getting them to partner with a small business is difficult. So if you just use their content anyway and hope they don’t notice or care until you’ve proven you have something of value, then everyone wins. (Still feels wrong to me though.)
Whatever you do, give attribution and provide a link. Most publishers are cool with this. Just don’t scrape the AP, because they will sue your ass.
Congrats to UrbanSpoon! Looking forward to see how they integrate further with CitySearch.
congrats to the founders. i am completey unimpressed with iac’s innovation and user acquisition efforts. they need to buy what they dont have asap. talent and innovation.
RecommendationLocator.com – what’s up
How did they use the Citysearch Api? Didn’t think that was available.
Who needs an API when you can do web scraping with Perl and iMacros?
So how much commission the marketing person at apple is going to get?
Enough to maybe buy you some courses in English
LOL…that must of hurt
Anyone know how UrbanSpoon was profitable from early on? Were they charging restaurants placement fees?
Its a great story of a self-funded company that reaped the rewards of their labor. Congrats to the founders.
Let it be known to IAC that I officially invite them to make me an offer on http://www.worstpizza.com !
Congrats to UrbanSpoon! Ethan, Patrick and Adam are fantastic guys that executed on a very clear vision. They are models of focus. Best of all, they always know the best lunch spots. Its great to see more success from Jobster brethren.
At the recent Web2NewYork meetup I’ve heard that IAC execs where talking with NYC based startup FriendsEaT.com. Is this an arms race for restaurant local search?
East Coast Citysearch vs West Coast Yelp?
I would guess 6-8 million dollar buyout
if that is true damn i need to get a mac fast and just do nothing but iphone development if iphone apps are getting that type of offer.
UrbanSpoon was a site first and continues to be a high traffic site– with a nice shot in the arm from their iPhone app.
bootstraps are the most interesting because its purely about product and content… not financing or who you know..
@BrendanBiryla
Guias Local, offers you a big Congrats!!! Urban Spoon you have proven being a self funded company in this market is the way to roll. You are enjoying your bootstrap success. It can be tough but well worth it.
I think the ratings on Urbanspoon are mostly useless. According to Urbanspoon, Chickie and Pete’s is the 4th best restaurant in Philadelphia, WTF?
http://www.urba...ts-Philadelphia
This was a purchase by IAC purely for the Uspoon iPhone app. Citysearch has been getting crushed by yelp over the past year, and need a boost to reinvigorate traffic.
Uspoon has never been a destination anyone wanted to visit. Look at their 1 year graph. Prior to the iPhone app (and free nation-wide Apple commercials), they were barely staying alive. Also the uptick in traffic (still tiny in absolute terms) is due to traffic hits directly related to their app (lots of Apple adverts focused on your app will do that).
I like M.G.’s guess on price. Realistically, “an offer we couldn’t refuse” for a company making no money isn’t necessarily a lot.
So am I dumb? The article said they were basically profitable? What was their income source pre-buyout?
Great simple and useful app they defiantly deserve this. They should flip a few chips to the dealer (apple)
Exciting news for people who run website without external funding. I always thought with bigger player such as yelp, and citysearch, all other small local search/review website will be pushed out of the scope. The story of urbanspoon certainly show that if you can do your things good and really good, you probably still have chance to succeed. For local search/review site, I am thinking of website focused on one local area, which you knows better than others in the national wide site, or the website focused on specific topics you knows better.
Our website Chinese Food Map (http://chinesefoodmap.com) is just one of example of the second category. We know Chinese Food Map better than others. Our user provided contents are mainly from the Chinese American who know it very well too.
Good luck for the small website