This can hardly be considered news since Techcrunch and a few other media outlets reported on it two months ago, yet I feel I am obliged to add my own opinion since this story affected me personally and in a big way. My long time readers sure know that rounding up deal sites every month is not the only thing I do in life as one would think by looking at the recent articles on this blog. So here is the gist of it.
In late 2007 I launched my latest project with Mike Glozman of CheapStingyBargains and things went fine for some time. 2010 however marked an important event, one I couldn’t tell you about earlier but now I can. My partner chose to quit Buxr leaving me as the sole owner and the main reason for doing so is in that Techcrunch’s report. WhaleShark bought Mike’s business and part of the agreement was that he would not run any other deal site. This obviously meant I had to pick up the tab and continue alone.
Now back to the main story, WhaleShark is an Austin based startup that seems to be emerging as a big player in the deals/coupons market. They have acquired a bunch of websites and also got control of deals.com domain (read my earlier review of the website), which I think is a dream of any entrepreneur with a passion for deals. When you grow to a scale like this, you obviously have an advantage in a number of ways which my guess is what WhaleShark is trying to explore.
Having run a deal site for a couple years now I can tell you that merchants love big affiliate accounts. The deal sites that bring large sale volumes get all sorts of perks in a form of increased commission and incentive bonuses. In addition, web is the environment that scales extremely well. From the technical perspective, a website that serves in 100K visitors a day vs. 100 visitors a day doesn’t cost that much more to maintain. So by combining several sources of deals under one roof WhaleShark potentially can archive larger revenue margins and bigger profits, something the investors are betting on.
What will happen to the communities built around the deal sites the company acquired? Will these sites be able to maintain their individuality? I think this will be the ultimate challenge of the new owners. You can lower your costs via technological improvements and new affiliate contracts, however there is very little you can do if your members are not happy with the new content or the new way you choose to run your site.