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Endurance Turns the Page on ‘Good on Paper’ Acquisition

Seven and a half years ago, Constant Contact acquired the assets and operations of SinglePlatform for just over $60 million in cash plus about $30 million in earn-out money.

As this article in TechCrunch at the time of the acquisition points out, the acquisition made sense, at least on paper.

Take the 10,000 (at the time) SinglePlatform customers and expose them to the benefits of email marketing, while simultaneously exposing Constant Contact’s 500,000 customers to the benefits of publishing more storefront information.

Elegant indeed. But as with so many transactions, what looks good on paper often unravels upon first contact with reality.

Such was the case with Constant Contact and SinglePlatform. Now, SinglePlatform has been sold by Endurance International Group — Constant Contact’s current owner — to TripAdvisor for $51 million, less than what Constant Contact paid back in 2012.

Endurance inherited SinglePlatform when it acquired Constant Contact for $1 billion back in 2015.

Misaligned from the Start

Aligning a vertically focused platform with a broad horizontal platform doesn’t seem like a winning idea in hindsight.

There is no doubt the teams at Endurance, Constant Contact, and Single Platform worked very hard to figure out how to make what looked great on paper actually work in real life.

Sure, Constant Contact could mine its 500,000 customers for restaurant leads. But maybe figuring out which customers were the right kind of restaurant wasn’t so obvious?

Maybe they could have lined up a direct channel to cold call restaurants off a purchased list, but what synergy would that have been exploiting?

Again, the choice certainly looked better at the time than it does now. Constant Contact was trying to find more ways to monetize its large base of customers. And Single Platform was helping the consumers by exposing them to more and more menu content to help them make dining choices, and in doing so it delivered excellent value to restaurants.

Ok, so now Endurance has about $50 million more to either pay down debt or find a property where greater value can be leveraged. Having paid some $60 million those seven and a half years ago (it’s unlikely any of the $30 million in earn-out was ever paid), it doesn’t look like a great deal — on paper.

But there were most likely a host of learnings that Endurance took away from the journey that they can apply to initiatives going forward.

Now, in TripAdvisor’s hands, Single Platform’s content and data assets can be leveraged.

Since TripAdvisor is often used to identify dinning options in near or far places, having a deeper and richer menu data set should resonate with TripAdvisor users. Even more, TripAdvisor is aggressively pursuing the reservations space having recently acquired The Fork in Europe.

While I am not an SEO expert, the richer content should help TripAdvisor with organic ranking. With Google pushing hard on tying food photos to menu items, TripAdvisor has the resources to stay competitive with Google — something a small team inside of Endurance probably could not have pursued.

Lessons Learned

First, what looks great on paper is almost always hard to execute in reality. Even more, trying to marry deep vertical experience with a broad horizontal play is usually a red flag of trouble ahead.

Acknowledging failure is often a difficult step for management teams. Kudos to the Endurance team for recognizing that try as they might, fitting the vertical square peg that was Single Platform into ConstantContact’s horizontal round hole was never going to work.

We’re eager to see how TripAdvisor uses Single Platform to enhance what it delivers to consumers, whether they are searching for menus, photos, or reservations.

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