E Business Hot Or Not Case Study
HotOrNot
J eanine BENJAMIN
,
C ristina BURDEINAIA
,
C hiaHsuan CHIANG
,
L yndsey NOEL 1. Summary and brief analysis
HotOrNot can be defined as a phenomenon and trend of our modern society of meeting and mating through a website, app, and being behind a screen. The meetingrequests contains members’ decisions about whether or not they wish to meet other members (randomly generated from HOT or NOT.com’s membership database) after viewing pictures and brief profiles of those other members.
This web site has the big streight that it has a big number of members and a huge traffic on it. The opportunity of growing for the website because of the growing number of people interested in meeting people in that way. Our SWOT analysis and the class discussion show that this is a web site intented to be successfull, with a bad fate of being cloned and copied by others. 2.
Assessment of the purchase
In 2008 HotOrNot was sold for $20 million, how do we justify the price of this acquisition? In order for this acquisition to make logical sense, we would have to find out whether the benefits outweigh the costs. It is clear that in HotOrNot case, the costs were minimal as there were bandwidth costs in the beginning, and this cost would decline and close to zero as time went by. therefore we shall focus on benefit for now. To begin with, it is understandable that the sources of income revenue (the benefits) included ads and subscription fees from members. In terms of Ads, we knew that clickthrough rates were as low as 0.2% and generally made $0.5 revenue per click, but HotOrNot could still generate $100,000 ads revenue the first 3 months after launch in 2000.
Therefore we believed that the customer base was large enough to make a deal, and for the full year 2000 the company made
J eanine BENJAMIN
,
C ristina BURDEINAIA
,
C hiaHsuan CHIANG
,
L yndsey NOEL 1. Summary and brief analysis
HotOrNot can be defined as a phenomenon and trend of our modern society of meeting and mating through a website, app, and being behind a screen. The meetingrequests contains members’ decisions about whether or not they wish to meet other members (randomly generated from HOT or NOT.com’s membership database) after viewing pictures and brief profiles of those other members.
This web site has the big streight that it has a big number of members and a huge traffic on it. The opportunity of growing for the website because of the growing number of people interested in meeting people in that way. Our SWOT analysis and the class discussion show that this is a web site intented to be successfull, with a bad fate of being cloned and copied by others. 2.
Assessment of the purchase
In 2008 HotOrNot was sold for $20 million, how do we justify the price of this acquisition? In order for this acquisition to make logical sense, we would have to find out whether the benefits outweigh the costs. It is clear that in HotOrNot case, the costs were minimal as there were bandwidth costs in the beginning, and this cost would decline and close to zero as time went by. therefore we shall focus on benefit for now. To begin with, it is understandable that the sources of income revenue (the benefits) included ads and subscription fees from members. In terms of Ads, we knew that clickthrough rates were as low as 0.2% and generally made $0.5 revenue per click, but HotOrNot could still generate $100,000 ads revenue the first 3 months after launch in 2000.
Therefore we believed that the customer base was large enough to make a deal, and for the full year 2000 the company made