Wednesday, July 11, 2007

Sidestep can't stay out of the news - what will be next

Sidestep seemed very comfortable for a long time being a pure meta-search company (is arguable that they invented the model). The economics were simple - buy traffic from GYM (Google, Yahoo, MSN) cheaper than you can sell it to advertisers who will come to the site because you can deliver highly qualified traffic. However somewhere something started to break in the model, most likely this was that PPC costs for the best of the travel keywords were becoming too expensive. Traffic had to be acquired in cheaper ways. So Sidestep has gone on and acquisition and content deal blitz-a-thon.

The latest is today's announcement of the acquisition of travel social network TripUp (here is the paidContent story). TripUp has all the usual features of a social network around travel - reviews, videos, photos, community, interest matching etc. What it does not have is a way to search and book travel.

Rolling up all Sidestep's recent activity now they:
That means content, distribution, meta-search and money. There are also very strong confirmed rumours of profitability.

So what is next for them? Not sure if it is time yet for a sale. To extract the most from their valuation they probably want to have a longer period of earnings growth. But I expect them to continue with content and distribution acquisition through either buying more companies or further licence and affiliate deals. On the product side there is more international expansion to do. I am also sure they are contemplating more in the area of video and photos (Hotelsbycity for example). To round off the speculation, what about a technology buy. Something that would improve their ability to push contextual deals in automated forms - think Google Adsense but for travel deals.


Anonymous said...

You're right. SideStep is in the news all the time these days! One question in an otherwise great piece - are you sure that Tripup is claiming 6 million users? I think that's SideStep's user number, at least according to their press release. Tripup's pretty small still. Cool acquisition though. I've been a SideStep fan for years.

Tim Hughes said...

You're right. A mistake on my part. Thanks a lot. Will change the text

aop said...

For some reason SideStep has stayed off the mainstream radar...or at least that's my perception.