March 1st, 2007
CitySearch bails out InsiderPages: What's the deal?
IAC is taking the struggling InsiderPages local reviews site off of the hands of its founder Idealab and investors Sequoia capital and Softbank Capital.
Bill Gross, Idealab CEO, waxes poetic at the Idealab homepage:
We began Idealab with the dream of creating ground-breaking companies whose products and services would change the way people think, live and work.
Meet some of the companies who have helped fulfill that dream.
As of today, Idealab founded “dream” company InsiderPages is one of Idealab’s bad dreams.
Is IAC's CitySearch the new lucky owner, or will it soon find InsiderPages to be a nightmare investment?
The CitySearch distress takeover of InsiderPages may actually be an insider deal. Idealabs proudly showcases Citysearch on its Website homepage as an Idealab “legacy company.”
CitySearch undoubtedly got a bargain basement price for InsiderPages.
CitySearch itself was acquired by IAC nearly ten years ago "for next to nothing," and that was all it was worth, so confided Barry Diller at the recent Media Summit in New York City. Diller also shared that for eight years he had to go before his board to defend all the money he kept pouring into CitySearch.
The CitySearch story has a happy ending, so suggested Diller. Eight years and $280 million dollars later, CitySearch reigns supreme, locally.
Or does it?
What is InsiderPages? Idealabs envisaged it to be:
Yellow Pages written by friends, a local search engine built around the concept that the best way to find a local business is through a personal recommendation. The Insider Pages community has written over 500,000 user-generated reviews of local businesses across the USA.
Peter Krasilovsky goes behind both Insider Pages and CitySearch numbers, reviews numbers that is:
The freshness of Insider’s reviews has been a question mark. The company has been citing the “600,000“ level for about a year. While it quickly ramped up its gross number of reviews by handing out $10 Starbucks cards to writers of ten reviews, the growth seemed to stop when it stopped handing out the cards (and similar promotions)…
CitySearch itself has been expunging dated reviews from its database, some going back several years. The number of its remaining reviews come to 400,000. Together, the two sites will have one million.
Krasilovsky also recently mused on a possible asset valuation for InsiderPages, noting “$9 million or so is a lot for what are –basically– aging reviews.”
Aging, and perhaps agenda driven as well!
Krasilovsky is helping produce the upcoming Kelsey Drilling Down on Local conference, and I will be there too!
I reported extensively on Kelsey’s local conference in Philadelphia last December and will be bringing you the same day by day, local play by play straight from Santa Clara! STAY TUNED!
FOR NOW: Google Local Search: $31 billion risky business and IAC CEO Barry Diller on Ask.com and Jim Lanzone’s vision for Ask.com: ‘Real Deal’ Interview
