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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

#91

Post by shamblesRed »

jartelt wrote: post #24
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…

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…

This is simply not true. I don't think anyone would pay $4 billion for a referral stealing chrome extension anyway

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

#92

Post by pbreit »

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…

I don’t like to hate on acquisitions especially by smart companies like PayPal but I don’t understand this one at that price. I’ve tried Honey several times and it’s mostly annoying. I suppose one could save a buck or 2 here and there but that’s about it. And you’ll end up at a retailer with lousier total offering.

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

#93

Post by CydeWeys »

shamblesRed wrote: post #91
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…

This is simply not true. I don't think anyone would pay $4 billion for a referral stealing chrome extension anyway

They're paying for the large existing userbase, regardless of how that large userbase was acquired.

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

#95

Post by thesausageking »

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 literally what PayPal did. They gave users $20 if you created an account. Over time, they lowered it to $10 and then $5. The program cost them ~$70m, but let them grow at 7-10% / day. They went from 800k accounts in March of 2000 to 4m in September, and then 11m in September of 2001.

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

#96

Post by namibj »

josephjrobison wrote: post #85
eaenki wrote: post #39

Earlier quoted context omitted.

Given the timing, network effects, potential, address book data and $0 CAC, they were stealings and I can’t believe Honey sold for $4B. Sounds off by x5+

You’re saying Honey is worth $20B?

Pretty sure parent means the other direction.

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

#98

Post by netsharc »

dyeje wrote: post #94

How is Honey worth even remotely close to 4B. It is a coupon aggregator in a browser extension?

For one thing, userbase (see other replies), for another, there's too much cash floating around looking for good ROI, thanks to governmental policies.

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

#100

Post by anthony_doan »

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…

Referrals.

They work with other companies, and these companies give them a unique code to apply for discount. When users use these code they get a commission. It's like CJ (commission junctions www.cj.com) that many other websites such as slickdeals uses. I used to work for one of these start up that does slickdeals like websites.

They're exactly like Rakuten.

You use their browser extension and they'll apply the code for you automatically. I believe all of these codes are via cookies.

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