Hot or Not acquired for 20 million

http://www.techcrunch.com/2008/02/11/hotornot-apparently-very-hot-acquired-for-20-million/

by johnrob • 18 years ago

59 23 18 years ago

techcrunch.com

cellis2• 18 years ago

4x valuation or do i remember less from accounting than i thought?

Their annual revenue is estimated to be around $5 million, with $2 million in profit.

Doesn't make sense to me.

aston• 18 years ago

4x valuation would be small, i.e. not expecting too much growth.

run4yourlives2• 18 years ago

It's not small, it's realistic.

All the other valuations are retarded, that's all.

rms• 18 years ago

I think it's worth less because the founders aren't vesting in the new company or anything; they're quitting.

carpal2• 18 years ago

3x revenue is pretty standard for businesses that aren't really growing anymore. Seems like a pretty solid deal to me.

nostrademons• 18 years ago

Businesses that aren't growing anymore usually get valued based on earnings. The P/E of the S&P 500 is about 20 (perhaps a little less after the recent market turbulence), which means that HotOrNot's price would be about half the average publicly-traded corporation, including all the old-line manufacturing businesses and companies in decline.

utnick• 18 years ago

Yea i don't see the point of selling for 20 mill when you are generating that much revenue. It shouldn't take that much of their time to run that thing, I would just let it ride.

jkush• 18 years ago

I don't see hot or not still pulling in 5M anually four years from now. Hot or Not seems like it's probably going to have a shelf life. While I think you do have an argument, taking the money is probably the best option.

brett• 18 years ago

Last year they converted to a C Corp so they can't really pay themselves through the same way anymore.

http://james.hotornot.com/2007/02/on-having-balls-part-ii-st...

run4yourlives2• 18 years ago

That's a completely normal offer in the world of regular business, in fact, it's pretty good considering some of the particulars.

When non-outlandish deals and realistic valuations stop making sense to you, it's a clear sign that it's time to explore life outside the valley a bit!

ironwill• 18 years ago

The discussion here goes to show how valuations are still stretched. In any "normal" times (i.e exclude late 90's bubble and the mini-bubblet of the last couple of years), valuations like 3-4x revenue would be considered perfectly reasonable, for a relatively mature yet risky play like this (risk because the audience could get bored and leave, as seems to be already happening).

After a prolonged downturn (Japan anyone?) we wouldn't be arguing whether 3-4x revenue is too low. We would be surprised any deal at all got done.

inovica2• 18 years ago

I say good for them for taking it. How many of us on here would be very happy if someone offered us right now $20 million. I know I would. Sometimes its worth taking what you can and moving on with your life - these guys will never have to worry about money again if they are careful with their money and on the basis that they are now free they can involve themselves in other ventures. Well done to them

michelson01• 18 years ago

they were already making millions a year for many years. it's not like they were broke before this.

inovica2• 18 years ago

and your point is?

Mistone• 18 years ago

20 million is no joke - for a startup that has already paid them very very well for a long time and put them in the web limelight for many years - its a great deal.

I was a bit shocked by the price - when startups are getting all these crazy valuations and acquisitions it seems crazy that such a successful, profitable, and valuable company only got 4x. Sometime valley logic is ass backwards - but its all good - these guys built a kick ass business and made out with loads of cash - well done all around.

wallflower2• 18 years ago

Congratulations to these pre-Web 2.0 Web 2.0 founders...

Hot or Not is a superb example of being in the right place at the right time with the right idea and the right skills and a bit of luck

"It all started the evening of October 3, 2000, when I was sitting in my living room sharing a few beers with my roommate, Jim Young, and my brother, Tony. Jim had just mentioned that he thought a girl we had met at a party was a perfect "10," when the idea suddenly came to me: "Wouldn't it be funny to have a Web site where you could rate random pictures of people from 1 to 10?"

...I got about 15 hours of sleep over AmIHotorNot.com's first eight days—the time during which we addressed most of our scalability issues. Eight days after launching, we broke the one million page view barrier, reaching more than 1.8 million page views that day. By the end of November, we made NetNielsen's list of the top 25 advertising domains.

The site now runs smoothly, and has handled as many as 14.8 million page views in a single day without even yawning. Looking back, I think that week of scaling easily wins distinction as the most stressful, most exhausting, most rewarding week I've ever had in my life. In this trial by fire, we certainly learned an incredible amount about building and scaling a Web application."

From the story of amihotornot.com's first week of life (and near death by HTTP requests)

(http://www.webtechniques.com/archives/2001/05/hong/)

neilc• 18 years ago

I'm just curious, but what makes them "Web 2.0 founders"?

wallflower2• 18 years ago

Web 2.0 is about user-generated content/discussion. They were ahead of the curve in realizing and/or stumbling on that. Yes, user-uploaded pictures barely meets minimum standards for "user-generated content" and hot-or-not voting barely meets minimum standards for "discussion". And you might say it was the first Web 2.0 site that spread virally..

jrnewton• 18 years ago

yawn

Hot or Not acquired for 20 million

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