If you weren’t paying attention (and there wasn’t much news about it) the SellingSource, a relatively unknown company that owned PartnerWeekly an affiliate network “bought” KitaraMedia, the QInteractive Network and half a dozen associated companies. That being said, there are some good reasons that this was kept under wraps and that they are calling this a “acquistion” instead of what it really is, a merger and creation of a larger company. Read on how this will affect the industry, and what really happened.
For those who don’t know, you can create a merger, acquisition, or about anything you want legally and accomplish the same thing. In this case, while the actual details aren’t really known, since this is not a public company, the entity “SellingSource LLC” a company located in a professional office building in Las Vegas bought a much larger entity that is often known as TheUseful but has some other names related to its investment and holdings. The name of the company TheUseful wasn’t mentioned because , while personally I think it’s a pretty damn good innovative company, it’s been associated with compliance issues in regards to its almost decade long history of “free ipod” offers.
Behind this entire deal is the company WorldAvenue, the investment company of NiuNiu Ji, probably one of the most reclusive yet most influential people in the industry. He is the creator of TheUseful and has been the owner of many of the companies involved with this merger. He’s a very, very wealthy Chinese guy and frankly one of the smartest people I know. The new CEO of SellingSource is Dale Baker, who has been the President of WorldAvenue, Intrepid Investments and TheUseful for the last five or so years. He’s now the public face of this new conglomerate. The reason for this is simple: they are trying to leave TheUseful name, with its association of FreeIpods and such (even though it’s a substantial business) and look to be a bigger company with a new name.
That being said, what does this mean for the industry, what is the real impact? Honestly, we could be seeing the creation of what could be the largest interactive advertising company out there, with tentacles in every single part of the industry, enormous influence and ability to create significant revenue that would rival most major companies in our sphere. One of the main influencers in this creation is KitaraMedia, run by my long time friend Bob Regular (please note that Bob bought ADOTAS from me, and also runs this publication). While this is a RightMedia network (say what you will), they have great revenue, very good reach and significant connections within the direct response community.
The rest of the companies involved, from CoolSavings to QInteractive are extremely important because they have long term names that anyone who has been around this industry knows these companies. While they aren’t as big as they were last decade, they have significant brand value and bring legitimacy to the entire venture.
The real thing to notice in this merger is the enormous amount of data involved. Many of these companies are involved with the collection and then mining of that data. In theory hundreds of thousands of records a week are collected by all these companies, along with demographic and other data and if shared between all these companies would create possibly one of the largest networks of consumer information. That is just huge to say the least.
Are there any issues with this company? Yes – the biggest issue is their past name, which they are trying to get rid of. Another issue is that they continue to work with dozens of affiliate companies that are themselves caught up in scandals. Honestly, they will have to make sure that they aren’t involved with another lawsuit where some “Scam King” is named along side of them, as it could destroy their entire business. On top of that, they will most likely be under the watchful eye of the FTC for the next several years as data and consumer protection becomes an issue – expect to see them release some press releases addressing that and what steps they are taking to protect data and to use it ethically. I also expect that they will have to acquire a significant brand company, agency or network – right now they are 100% focused on direct response and can’t compete with a company like EPIC unless they have that brand side of the industry wrapped.
Nevertheless, everyone needs to pay attention to this new conglomerate and expect that it will be making significant waves in the industry.