The team at VerticalScope Inc. is always on the lookout for more properties to add to the platform, and they seem to have found a recipe that works: The business has made more than 200 acquisitions in the company’s history. Thirty of those were within the last year.
“It’s how we’ve built up scale,” said Chris Goodridge, president and COO at VerticalScope. Still, the company is choosy about its acquisition targets, Goodridge said, and it has a large network of relationships with website owners and people in the business of starting and selling sites. “We’re scanning and looking at literally thousands of opportunities a year,” Goodridge said.
So what does the team look for? For starters, Goodridge said he wants to see a strong, organic traffic base. The site should have repeat users and a healthy community of people who are actively engaged and contributing. Though VerticalScope doesn’t exclusively buy user-generated content properties, they make up a large portion of the acquisitions. The focus and strategy are centered on product-focused discussions, Goodridge said.
“The key theme is that we’re helping people make purchasing decisions across a variety of niches,” he said.
With that in mind, Goodridge said he steers away from sites that are overly monetized, favoring ones that serve a community.
“We’re seeing that trend and I get why an owner would want to do this to make as much money in the short-term as possible,” he said. “But we find that there’s a real trade-off between long-term growth and short-term monetization.”
Examples of acquisitions include Hometalk – a community of DIYers – and The Streamable, aimed at helping people find where to stream content in an era of increasing fragmentation in the streaming space.
How to monetize may evolve over time, but for Goodridge, the fundamental question comes down to: What value are you providing to a user or consumer at the end of the day?
“Monetization is secondary,” he said. “You want to make sure you’re solving a problem for people in an engaging way that can really make an impact in their lives.”
As inflation creeps higher and interest rates rise, those fundamentals don’t change when considering an acquisition, Goodridge said. “Our objective is to build a business that is going to be here for a very, very long time,” he said. “We’re not in it for short-term monetization and a quick sale.”
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