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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

#21

Post by delusional »

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…

Supposedly they make money from referrals, so if you buy something from Amazon, they load in their referral link.

From what I've heard they don't actually sell purchase data. I don't know for sure though.

I don't understand how referrals are worth 4b though.

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

#22

Post by kevindong »

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…

Major retailers typically have affiliate programs in which if an affiliate (say Honey) refers a customer to the retailer and the customer then makes a purchase, then the retailer will pay out a commission to the affiliate.

This model is substantially similar to RetailMeNot, except Honey will automatically try every coupon they know of for you automatically.

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

#23

Post by [deleted] »

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…

[deleted]

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

#24

Post by jartelt »

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 is a portion of their affiliate commission.

In some sense Honey can steal the affiliate commissions from blogs and other websites since you use Honey right before the sale.

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

#27

Post by kevindong »

lccarrasco wrote: post #16
kevindong wrote: post #11

Earlier quoted context omitted.

Importantly however, Venmo doesn't make money on peer to peer transactions that use bank accounts, which I'd imagine is what most people do as that's free. Consequently, Venmo is not profitable. https://www.cnbc.com/2019/04/24/venmo-has-40-million-users-p... .

Venmo transactions' data and the social network inferences you can make from them are probably pretty valuable on their own.

But Venmo/PayPal don't have any ads?

Furthermore, just because you can link people together, it doesn't mean that knowledge is actually valuable. The only social network you can link to Venmo currently is Facebook. The only other way to "discover" contacts/friends is by uploading your contact book to Venmo's servers.

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

#28

Post by bradlys »

delusional wrote: post #21
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…

Supposedly they make money from referrals, so if you buy something from Amazon, they load in their referral link. From what I've heard they don't actually sell purchase data. I don't know for sure though. I don't understand how referrals are worth 4b though.

I don't think Amazon works with them anymore for referrals? Other websites might though.

Rakuten/ebates works the same way. You go to a website, turn on the referral program, and then the plugin will send you a physical check in the mail once you hit a minimum amount (and it will be at most quarterly).

If you have customers spend $1B+ quarterly using these plugins and you get maybe 1% cut then you're getting $10m cash/yr plus all kinds of browsing data to sell analytics on.

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

#29

Post by Infinitesimus »

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.

Venmo caught on likely because of Facebook integration

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

#30

Post by bowmessage »

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…

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.
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