Updated: Jake Winebaum is a fellow Time Inc. refugee and we have talked in the past about everything from missed opportunities at our ex-employer and of course Business.com. He joked about the jokes about his and Sky Dayton buying Business.com for $7.5 million back in Bubble 1.0. Well, if you read this morning’s Wall Street Journal then you can guess, who is having the last laugh. Many are focusing on the domain Business.com, missing why his company would fetch anywhere between $300-to-$400 million in an auction.
“It’s not simply a URL that is being sold, there’s an actual business there ” writes HipMojo. Absolutely! Anyway I dropped Jake a note this morning to chat about the ensuing brouhaha. “Unfortunately I can’t comment on what you read,” he wrote back in a quick. What I can tell you is the company doing great.”
According to the Journal, Business.com had 2007 “earnings before interest, taxes, depreciation and amortization of about $15 million” and their traffic grew “50% in the first quarter of 2007, compared with the year earlier.” The $350 million price tag would value the company at about 24 times cash flow.
However we have learned that revenues are in the $50 million plus range with profits in low teens. So from that perspective, the deal would be seven times sales.
Business.com has built a yellow-page equivalent of resources and other related stuff that targets small to medium sized business. It has built up affiliate relationships with everyone from broadband providers to stationary sellers. This directory backend is served up on sites like Inc. magazine’s website. (We discussed working together, but frankly I couldn’t get my act together.) Business.com’s business is not exactly the kind that is going to end up in the pages of Portfolio magazine, but it is as mainstream as it can get. (Paul Kedrosky was talking about mainstream web yesterday.)
Who could be likely buyers for this company? Traditional media companies, of course. But it would be strategic fit for Yahoo, which already has a big exposure to the SMB segment. If the deal does go through, it would be a big payday for Benchmark Capital, one of the backers of the company.
11 comments so far
1:55 PM PT
Another fake business/site and major reseller of Google links. Take Google away from this business and what do you have?
Has any serious business person ever used business.com? I think I know the answer.
They deserve credit for creating a site that looks semi-real. When you peel away the onion you quickly realize there’s not much there.
2:36 PM PT
[...] might get it, too. A number of Web commenters, including Ashkan Karbasfrooshan at HipMojo.com and Om Malik at GigaOm, think the economics are [...]
3:07 PM PT
I totally agree. Business.com might smell good, but in reality people only list there for the back link to get higher search engine placement. Soon, people will realize that listing on Business.com isn’t worth the money, especially if their pagerank decreases.
4:39 PM PT
300-400 mill? Waaaaaaaaaaaay overpriced.
Anyone even considering paying so much would be better off following in Business.com’s now well-known (and highly visible) footsteps and building their own success with a related/variation domain like Businessly.com.
5:00 PM PT
Good points all of the above, but i think their main business is providing white label services to other sites.
I wonder how much traffic drops on B dot com really.
8:20 PM PT
The price is probably fair given the brand equity of the url.
9:13 PM PT
[...] like it or not, there’s a business at business.com — not just a domain name. Also, Om Malik explains other assets that go far beyond the URL that Business.com represents, primarily the affiliate [...]
8:25 AM PT
business.com just got sold for $350 million.
Impressive as that sounds, it wasn’t such a great pay day after all given that $85 million or so was sunk into it.
http://www.bizorigin.com/2007/350-million-for-businesscom-not-a-huge-payday/
4:38 PM PT
Business.com sold for 350 million, correct? They have value correct? So why are all these commentors upset about a business that created a great system for business professionals to use. I think most of these negative commentors are upset due to the fact that their company or website will never sell for even close to 350 million. Its like when you look at your wife and then you look at a playboy model. Yea it sucks but deal with it thats life. Here’s a great piece of advice from a person who is very successful behind the web: try using the same energy that you use to write your meaningless comments and put that into your business. You are wage earners in the eyes of me and anyone else reading these absurd comments. Remember ,your opinion means nothing. I can tell by the way you write that you still dont get it. Please, you need to know all the facts before you comment and look like jealous underlings. Business.com is business not a website. They bought a business that is profitable. Do the math skippy and figure out if they hold the company as a long term investment I guarantee it will be turn them a considerable profit. The one who is laughing is R.H. Donnelley. Great buy!!!
4:49 PM PT
Business.com sold for 350 million, correct? They have value correct? So why are all these comentors upset about a business that created a great system for business professionals to use. I think most of these negative comentors are upset due to the fact that their company or website will never sell for even close to 350 million. It’s like when you look at your wife and then you look at a playboy model. Yea it sucks but deal with it, that’s life. Here’s a great piece of advice from a person who is very successful beyond the web; try using the same energy that you use to write your meaningless comments and put that into your business. You are wage earners in the eyes of me and anyone else reading these absurd comments. Remember, your opinion means nothing. I can tell by the way you write that you still don’t get it. You need to know all the facts before you comment and look like jealous underlings. Business.com is a business not a website. They bought a business that is profitable. Do the math Skippy and realize if they just hold the company as a long term investment I guarantee it will turn them a considerable profit. The one who is laughing is R.H. Donnelley. Great buy!!!
2:06 PM PT
yea a margin of $265 million isn’t that great… making 400% profit is nothing these days… ha.
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