

Hot or Not acquired for 20 million - johnrob
http://www.techcrunch.com/2008/02/11/hotornot-apparently-very-hot-acquired-for-20-million/

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ironwill
The discussion here goes to show how valuations are still stretched. In any
"normal" times (i.e exclude late 90's bubble and the mini-bubblet of the last
couple of years), valuations like 3-4x revenue would be considered perfectly
reasonable, for a relatively mature yet risky play like this (risk because the
audience could get bored and leave, as seems to be already happening).

After a prolonged downturn (Japan anyone?) we wouldn't be arguing whether 3-4x
revenue is too low. We would be surprised any deal at all got done.

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inovica
I say good for them for taking it. How many of us on here would be very happy
if someone offered us _right now_ $20 million. I know I would. Sometimes its
worth taking what you can and moving on with your life - these guys will never
have to worry about money again if they are careful with their money and on
the basis that they are now free they can involve themselves in other
ventures. Well done to them

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michelson01
they were already making millions a year for many years. it's not like they
were broke before this.

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inovica
and your point is?

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cellis
point is they should have let it ride, seeing as the $20mm isn't really going
to change their life.

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cellis
4x valuation or do i remember less from accounting than i thought?

 _Their annual revenue is estimated to be around $5 million, with $2 million
in profit._

Doesn't make sense to me.

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utnick
Yea i don't see the point of selling for 20 mill when you are generating that
much revenue. It shouldn't take that much of their time to run that thing, I
would just let it ride.

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jkush
I don't see hot or not still pulling in 5M anually four years from now. Hot or
Not seems like it's probably going to have a shelf life. While I think you do
have an argument, taking the money is probably the best option.

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greendestiny
Not only that, but the founders tried to turn it into something huge and
failed.

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wallflower
Congratulations to these pre-Web 2.0 Web 2.0 founders...

Hot or Not is a superb example of being in the right place at the right time
with the right idea and the right skills and a bit of luck

"It all started the evening of October 3, 2000, when I was sitting in my
living room sharing a few beers with my roommate, Jim Young, and my brother,
Tony. Jim had just mentioned that he thought a girl we had met at a party was
a perfect "10," when the idea suddenly came to me: "Wouldn't it be funny to
have a Web site where you could rate random pictures of people from 1 to 10?"

...I got about 15 hours of sleep over AmIHotorNot.com's first eight days—the
time during which we addressed most of our scalability issues. Eight days
after launching, we broke the one million page view barrier, reaching more
than 1.8 million page views that day. By the end of November, we made
NetNielsen's list of the top 25 advertising domains.

The site now runs smoothly, and has handled as many as 14.8 million page views
in a single day without even yawning. Looking back, I think that week of
scaling easily wins distinction as the most stressful, most exhausting, most
rewarding week I've ever had in my life. In this trial by fire, we certainly
learned an incredible amount about building and scaling a Web application."

From the story of amihotornot.com's first week of life (and near death by HTTP
requests)

(<http://www.webtechniques.com/archives/2001/05/hong/>)

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neilc
I'm just curious, but what makes them "Web 2.0 founders"?

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wallflower
Web 2.0 is about user-generated content/discussion. They were ahead of the
curve in realizing and/or stumbling on that. Yes, user-uploaded pictures
barely meets minimum standards for "user-generated content" and hot-or-not
voting barely meets minimum standards for "discussion". And you might say it
was the first Web 2.0 site that spread virally..

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Mistone
20 million is no joke - for a startup that has already paid them very very
well for a long time and put them in the web limelight for many years - its a
great deal.

I was a bit shocked by the price - when startups are getting all these crazy
valuations and acquisitions it seems crazy that such a successful, profitable,
and valuable company only got 4x. Sometime valley logic is ass backwards - but
its all good - these guys built a kick ass business and made out with loads of
cash - well done all around.

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jrnewton
yawn

