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PayPal to acquire shopping and rewards platform Honey for $4B

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Re: PayPal to acquire shopping and rewards platform Honey for $4B

#41

Post by smt88 »

mrfusion wrote: post #35
kevindong wrote: post #13

$4 billion acquisition price / 17 million monthly active users [0] = $235.29 per active monthly user [0]: https://investor.paypal-corp.com/node/10556/pdf

Couldn’t you basically start any website and pay users $200 and get as many users as you want?

Yes, but when potential investors or acquirers were doing their diligence, they'd find out that your cost of user acquisition was extremely high.

It's likely Honey did have a high cost of acquisition, but nowhere in the ballpark of $200/user.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#43

Post by airstrike »

rconti wrote: post #18
hello_1234 wrote: post #9

Earlier quoted context omitted.

Venmo, owned by paypal, is very popular in the US. People use to split expenses among friends.

It's so odd, because Venmo is both newer than PayPal, yet limited in the same stupid ways PayPal is (multi-stage xfers), which Square Cash avoids entirely. It's perplexing to me that Venmo ever caught on.

Network effects. Square Cash is vastly superior but Venmo is the incumbent so it's hard to tell your friends "no, I have this other cash app you should install instead"

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#44

Post by crankylinuxuser »

graphememes wrote: post #14

I thought honey was a pure scam, it's not?

I was in the same boat. The few ads that got past my adblocker indicated the site was borderline porn-scammy. I stayed as far as I could away.

They feel similar as "Wish". Just as terrible. Don't trust them.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#45

Post by gravypod »

mrfusion wrote: post #35
kevindong wrote: post #13

$4 billion acquisition price / 17 million monthly active users [0] = $235.29 per active monthly user [0]: https://investor.paypal-corp.com/node/10556/pdf

Couldn’t you basically start any website and pay users $200 and get as many users as you want?

That's something PayPal did initially.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#46

Post by baddox »

mrfusion wrote: post #35
kevindong wrote: post #13

$4 billion acquisition price / 17 million monthly active users [0] = $235.29 per active monthly user [0]: https://investor.paypal-corp.com/node/10556/pdf

Couldn’t you basically start any website and pay users $200 and get as many users as you want?

In order to do that and get PayPal to acquire you for at least that much money, you'd have to convince PayPal that your users also spend money that makes it back to you. Honey's pitch probably wasn't just "we have x daily active users," but rather something like "we have x daily active users who are big e-commerce spenders, and we can make money by connecting our users with retailers."

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#47

Post by sturgill »

bowmessage wrote: post #30
jartelt wrote: post #24

Earlier quoted context omitted.

I've read that part of what they do is effectively steal affiliate referrals from other websites. Say you click on an affiliate referral link from a blog that takes you to retailers website. Normally that blog would get a cut of whatever you buy at that retailer. However, if you then use your Honey extension, their affiliate link takes over and gets credit for the sale. Honey can then give you a small discount that i…

How are online retailers ok with this? Surely this violates referral kickback ToS or something? Doesn't seem fair to not pay the _real_ referrer that leads to a purchase.

Rewards and coupon websites are notorious for leaching off the affiliate process without driving much incremental revenue. In the heyday of ABestWeb.com they coined the phrase ParasiteWare for places that stuff cookies like this.

The overall affiliate channel has become increasingly challenging to manage profitably from a merchant perspective. But it’s very easy for a “manager” to see all of the sales affiliates “drive” and assume that it’s making them money.

If you let affiliate sell for you, you had better invest in a professional affiliate manager that you can trust. If you source it to an intern you’ll lose a ton of money to leeches and fraud.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#48

Post by twostorytower »

Bootwizard wrote: post #15
twostorytower wrote: post #5

Earlier quoted context omitted.

Over 300 employees AND profitable. How many other startups have achieved that?

Sure but HOW does it make money?

I believe they’re an affiliate of many of the popular shopping sites. So they get a cut of any sales they help drive.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#49

Post by tzs »

danShumway wrote: post #12

How does Honey make money, aside from the obvious data collection? I know a few people who use it, and I've cautioned them in the past that I can't think of any savory business model that would make this profitable. Is there one? Is it just tracking purchases for advertisers, or is there some other monetization strategy I'm missing? Their main site says they make commissions, but I don't know how to square that with…

What they claim on their "About" page [1] is:

> Our Business Model

> We earn a commission from stores when you find savings. What we don't do is sell or share your data (you can read our Privacy Policy here)

> We're building a better way to shop, one that saves you time and money, even if there's less in it for us. If this sounds like a new way of doing things, you're right.

[1] https://www.joinhoney.com/about

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