I was right there when Lisa Sugar, co-founder of Sugar Publishing posted her first blog post during the Oscars 2006. Since then she and her hubby, Brian Sugar have turned their little hobby, PopSugar, into a full blown publishing company. With backing from Sequoia Capital and NBC, Sugar Publishing has become a leading destination for young women.
Today, the company decided to take the next step in its evolution and has bought Los Altos, Calif.-based ShopStyle, a social shopping site for an undisclosed amount of money. “We had content and community, and now we are adding commerce,” said Brian Sugar, CEO of Sugar Publishing. The company is also changing its name to Sugar Inc., in order to better reflect its broader focus.
The 3-C strategy is one that has withstood the test of time. C/Net (CNET) for instance did well from its e-commerce forays and so did Yahoo. Sugar Inc. is taking a page out of their playbook. Sugar Inc. needs to bolster its advertising revenues with revenue sharing deals.
The advertisers most likely to advertise on networks such as the Sugar network are reluctant to spend big dollars on banner advertising and are more keen on the more result (sale) oriented advertising. ShopStyle has been keeping a low profile but has built a platform which can extend the reach of the Sugar Network.
The tiny start-up has relationships with many online retailers and can help boost Sugar Inc.’s revenues via these revenue share arrangements. Sugar Inc., is logging close to 5 million unique visitors a month, and can turbo charge ShopStyle.
Brian Sugar explained that a lot of their community members were building shopping lists and saving information related to shopping. However, ShopStyle had a better mousetrap, and made more strategic sense for Sugar Inc. to acquire them. As part of this deal, Sugar Inc. will start offering widgets to other blogs as well. Content from Sugar blogs is currently offered on People and InStyle websites.
Disclosure: PopSugar’s parent company, San Francisco-based Sugar Publishing was started by two-and-half of my very good friends, Brian, Lisa and Katie Sugar. I apologize for intruding on your time.