Hearst buying Kaboodle (updated)
"Hearst has announced its second online acquisition in two weeks: first it bought UGO for between $100-$150 million, and now it is buying shopping recommendation site Kaboodle, reports WSJ. Terms of the deal weren’t disclosed. (Updated: Om says the price was around $40 million).
It started as a general sharing service, where people could save their search results from other sites, for other users to review…and then it quickly morphed into a commerce/shopping recommendation site, where users can browse, tag and collect finds from other shopping sites. The site’s 250,000 registered users can also rate and review the products they save...it generates revenue through advertising and affiliate relationships with more than 1,000 retailers.
Hearst wants to include Kaboodle’s service into the websites of its magazines such as Cosmopolitan and Good Housekeeping, mixing content with commerce. Also, it wants to develop Kaboodle into a larger independent lifestyle site by adding more content and then more advertisers, the story says."
"According to our sources went for somewhere around $40 million. Manish Chandra, founder and CEO of the 18-month old start-up based in Santa Clara, Calif., declined to comment on specific terms of the deal.
When I asked him why he decided to sell the company, he candidly replied, that “the stakes are getting higher, and others [competitors] are raising a ton of money.” What do that say, any exit is a good exit.
Chandra said that since a large percentage of Kaboodle users are women, and the site has an e-commerce/shopping component, it fit nicely with the larger goals of Hearst. He also added that the deal doesn’t impact its deals with Conde Nast properties.
There is an interesting pattern in some of the buys by big media corporations. They are not just buying pure-content, but instead seem to be interested in content-enhancing tools that rely on communities than individual content creators. Newroo, Photobucket, Reddit, Last.fm, Clipmarks and now Kaboodle fit that profile."
"The deal marks Hearst's attempt to tap a new area of e-commerce that combines online social networking with shopping, as it pursues new ways to engage magazine readers online while investing in fast-growing Internet businesses. Terms of the deal weren't disclosed.
Hearst says it is likely to build pages on Kaboodle featuring products from many of its 19 U.S. magazine titles, such as Cosmopolitan and Good Housekeeping, aiming to generate buzz around the magazines by allowing shoppers to sound off about the products they feature online. It wants to develop Kaboodle into a larger independent lifestyle site by linking it with deep-pocketed advertisers and more editorial content."
From Under the radar:
8. What does the future look like for Kaboodle?
Manish Chandra: We believe Kaboodle's social shopping community will fundamentally alter the landscape of online shopping - by connecting people with similar taste and style, and tying together the entire shopping process, from product discovery to purchase.
Most shopping platforms built to date have been optimized, not for lifestyle goods, but for products where decisions are based primarily on features and price, like electronics and computer hardware and software. These same platforms provide a solitary shopping experience, and work well for people who want to quickly and efficiently complete a transaction completion."
Update: From CNET:"With its impressive technology, tools and audience, Kaboodle is a natural overlap for Hearst Magazines," Cathleen P. Black, president of Hearst Magazines, said in the statement. "We think Kaboodle has terrific potential for many of our brands, especially in the fashion, beauty and consumer technology categories. Our readers will be able to find the products featured in our magazines, shop electronically with their friends and get their feedback. It's another means for making sure our readers stay engaged in today's saturated media landscape."