PayPal to acquire shopping and rewards platform Honey for $4B • Hacker News Board

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

#161

Post by sturgill » Thu, Nov 21, 2019, 1:03 PM UTC

Flenser wrote: post #51

sturgill wrote: post #47

Earlier quoted context omitted.

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 “dri…

What about services like revlifter[1] where you put their script on your basket page and they give customers offers based on their basket contents? [1] https://revlifter.com

I don’t know anything about revlifter. But I’ve been in this space long enough that I’m skeptical of most claims.

I usually try to build flows now that don’t ask for coupon codes at checkout (because that leads to deal searching right at the last moment). I prefer dedicated URLs with embedded offers as much as possible.

If you need to go the coupon code route, I recommend how Namecheap does it: they registered a unique domain (namecheapcoupons.com) that publicly list all coupon codes. They rank #1 in organic search results.

But, as a general rule, I encourage you to avoid working with deal sites and coupon affiliates. This is a general rule, but they tend to drive very little incremental revenue. You should also disallow any PPC campaigns using your branded terms.

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

#162

Post by geitir » Thu, Nov 21, 2019, 1:05 PM UTC

gamblor956 wrote: post #119

mikeryan wrote: post #112

Earlier quoted context omitted.

If Honey is inserting themselves between the blogger and the seller and then pocketing the commission, how is this not “stealing/hijacking” the commission?

Honey isn't inserting themselves between the blogger and the seller automatically. The user is doing that when they use the Honey add-on after visiting the blogger's website. This is no different then a user visiting a different website about the same product and clicking through the affiliate link on that new blogger's page before making the purchase.

Do you work for them? It sounds like you work for them. Based on your description, the crux of it is they exactly do insert themselves between a blog / affiliate link and their incentivization towards a specific seller exactly does replace whatever commission the blog would have seen

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

#163

Post by patd » Thu, Nov 21, 2019, 1:22 PM UTC

wongarsu wrote: post #153

patd wrote: post #147

Earlier quoted context omitted.

90% of affiliates are very small players that don't have any bargaining power. In most modern platforms, all the referrers are tracked. I'm pretty sure that big players do complain and they'll get a "first cookie" or at least partial attribution for the sales they make.

They have no individual bargaining power, but that doesn't mean they can be ignored. The more you ignore them the more go to greener pastures, the more you do for them the more resources they focus on your business.

In theory, yes. But that's not my personal experience (I'm mostly active in Europe).

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

#164

Post by rasz » Thu, Nov 21, 2019, 1:29 PM UTC

sdinsn wrote: post #25

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

To put it in perspective: WhatsApp: $55/user Instagram: $20/user

Skype : $240/user

Broadcast.com: $10,000/user

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

#165

Post by liveoneggs » Thu, Nov 21, 2019, 2:04 PM UTC

Hydraulix989 wrote: post #118

durbin wrote: post #50

Earlier quoted context omitted.

Wikibuy was already acquired by Capital One.

What about Wikibuy is a wiki?

wikipedia has tons of goodwill so calling yourself "wiki"-something is excellent free marketing

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

#166

Post by yalogin » Thu, Nov 21, 2019, 2:31 PM UTC

Honey is very similar to the ad programs we had during the early 2000s. People used to get paid for clicking on ads. Now the same idea is repackaged and used to gather browsing data and it’s worth 4billion? Why don’t companies look at the downside before buying these? One single privacy issue will kill the whole product. This is like buying a new car, PayPal already has Lot less than 4billion in its hands.

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

#167

Post by asar » Thu, Nov 21, 2019, 2:35 PM UTC

As others have mentioned, at first sight, this seems like a crazy valuation at $235.29 per monthly active user. But customer acquisition costs for financial products can be a lot higher than that. Honey is close to the payment process, this must be very valuable to PayPal, maybe because it gives them a clear advantage over other PSPs or because they can offer merchants another way to increase revenues and customer satisfaction. The tech might also provide an easier way to enter new markets since it would distinguish PayPal from other payment providers, i.e., entering a new market as the payment provider that's secure and lets you save money.

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

#168

Post by deelowe » Thu, Nov 21, 2019, 2:57 PM UTC

geitir wrote: post #162

gamblor956 wrote: post #119

Earlier quoted context omitted.

Honey isn't inserting themselves between the blogger and the seller automatically. The user is doing that when they use the Honey add-on after visiting the blogger's website. This is no different then a user visiting a different website about the same product and clicking through the affiliate link on that new blogger's page before making the purchase.

Do you work for them? It sounds like you work for them. Based on your description, the crux of it is they exactly do insert themselves between a blog / affiliate link and their incentivization towards a specific seller exactly does replace whatever commission the blog would have seen

Agreed. The parent is coming across as obtuse to the point where I wonder if it's intentional.

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

#169

Post by jacurtis » Thu, Nov 21, 2019, 3:19 PM UTC

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?

He is saying it is 5x too high. So the valuation should be 1/5th (20%).

So he is suggesting a valuation of $800,000,000 ($800M). Which in my opionion is about right.

That puts the value per user right at $47 per user. Again, which given PayPal's previous acquisitions, looks accurate.

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

#170

Post by giarc » Thu, Nov 21, 2019, 3:24 PM UTC

yalogin wrote: post #166

Honey is very similar to the ad programs we had during the early 2000s. People used to get paid for clicking on ads. Now the same idea is repackaged and used to gather browsing data and it’s worth 4billion? Why don’t companies look at the downside before buying these? One single privacy issue will kill the whole product. This is like buying a new car, PayPal already has Lot less than 4billion in its hands.

When I was a young teenager, I remember using one called AllAdvantage (IIRC). I believe you earned money by simply having the extension open while you browsed. Cash out minimum was supposed to be $20, but once I hit that mark, the minimum all of sudden changed. I never got my money.