$100M for daily candy?

the wsj reported tuesday that bob pittman (formerly of aol fame) had taken a controlling share in daily candy and that he now expected to sell the company for $100 million. if this is true (and with EBIT in the low teen millions it could be) this seems like a major wake up call to many of us in the industry.

many of us first learned of daily candy through our girlfriends and wives who all seem to love it. what could be that interesting on a daily basis? i’ll admit i’ve never once bothered to read it though i do remember browsing the site and being impressed with the cute women behind the scenes. (in no way meaning to belittle their brilliant acumen for creating a simple, profitable business where so many of us (like me!) went for far more ambitious and complex concpets that have yet to show a profit.

wake up! for me this was somehow similar to when i first heard in 1994 that cnet was raising money at the then preposterous valuation of $100 million. (funny how that number wakes me up even 12 years later.) isnt this the proof of the local internet riches we’ve all been groping for? only it came in a simple package (bad pun).

what can we learn from this candy? i’m still scratching my head. it spread virally through word of mouth. it seems like it was a very good, well thought service. it lacked the community and user involvement we’ve all grown to see as necessary. it was push and email based which seems to remain a better medium than pull and web. it went after young women which honestly never occurred to me. i would have assumed that new net services were dominated by geeky men.

would love to hear from anyone who actually uses daily candy.

6 thoughts on “$100M for daily candy?

  1. with the same “not exactly target market” caveat – i discovered Daily Candy a few years ago but now it has only earned an “archive immediately” gmail rule. What turned me off? An increase is the sponsored mailings where they were promoting for dollars and the lack of ability to personalize or fine tune the messages i was receiving.
    Surprised that they are doing the reported rev numbers just off the newsletter – i would have guessed that some brand expansion into other media would have occurred prior to a sale.

  2. if i’m not mistaken, daily candy has some syndication with major publications. ny times or the like. that must help revenues.
    what can we learn from daily candy? partner with mainstream media and use email before rss. that’s where the big audiences and payouts are.

  3. I heard about Daily Candy via an email news service about happenings online. This was several months ago. I immediately checked out the site because it is a niche strategy focusing on particular cities (similar to our niche focus on travelers who prioritize healthy living when away from home).
    I am 36 and female, and this was one for the first sites that I actually considered signing up for. I always check “NO” for emails about deals, sales, hints, tidbits etc. Granted, they do not cover San Diego…
    What jumped out at me during that first click through, was the web design. Missing are the typical stock photos and in their place are hand-drawn images. It works. It conveys personality, effort and caring. I think this fact alone will get anyone visiting the site looking around for a while.
    I doubt that my age puts me in their target demographic, but had San Diego been on their list, I just may have signed up.
    After recently launching our own site, I am aware of the extra cost associated with hand-drawn images. The extra character that results is significant, and since Daily Candy is targeting young women, it works.
    So, whether their reported $20 million in revenue is real and demands the $100 million price tag, I am not sure; although 5x revenue is not out of whack by any means. But in terms of attracting the customer, I credit the design for getting her to click through.
    Lastly, there is a paucity of original content out there. Daily Candy also delivers this. (So do we, by the way.)

  4. $100 million? That’s insane! I signed up for a dailycandy newsletter a few years back, after reading about them in Inc. At that time they were doing about $1m. I can’t imagine their revenues are more than $8-$10mil now. I guess whoever is willing to pay $100m, sees more value in the database than i do.

  5. it just seems stale.. and because i don’t really care about cheap bras or new kate spade bags (ie i have a LIFE, and i’m MALE) I can’t figure out how to pay attention to it. I’ve come to rely on flavorpill, because it focuses on things to DO rather than things to BUY, and as far as i know, flavorpill doesn’t do advertorial like dailycandy.
    intersting times though. wonder who’s next?

  6. What can we do?
    As entrepreneurs and Venture Capitalists, bring more women into the fold.
    Neopets.com, Dogster, Daily Candy, Make Up Alley, and the list goes on. There are dozens more successful communities out there focused on areas most of the Valley don’t spend time on: crafting, beading, fashion.
    What do they all have in common? They cotton to a demographic that isn’t well represented by the VCs. Something south of 5% of all venture backed startups each year are started by women. While people are arguing the merits of Digg vs Wink, there are people quietly building very happy communities.
    And as far as my personal opinion goes, I’ve not found Daily Candy to be an entirely compelling community experience.

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