Bankaholic Bought for $15 million

October 3rd, 2008 at 12:00 am
 


bankaholic bankrate credit economy finance money blog acquisition

Bankaholic a blog on the  finance sector has been acquired by financial information service provider Bankrate for a whopping $15million.

Bankaholic is a one man blog written by John Wu and he keeps most of the $15million.

In the midst of the economic gloom the US is facing right now, this exit for Bankaholic is fantastic.  Not only did it not need an exit, it got a great payout.  However it’s unclear why BankRate paid so much but with the economy dying, desperation drives anybody crazy.

There might be some sense in ti though.  According to PaidContent, BanRate has made a number of acquisitions lately.

BankRate, of course, is exposed to some of the nastier aspects of the economy, though it’s held up fairly well and continued to grow. It’s also made acquisitions in order to diversify its range of financial products-last December it acquired Savingforcollege.com and Nationwide Card Services for at least $29 million.

So diversity is one of the reasons for the acquisition. This still does not explain the hefty amount they paid for Bankaholic.  Further research by Mashable, reveals that this is for lead generation.  Here’s some data from Ted Murphy of Izea.

"Just in last three years alone, the prices for some of the bids have gone up 200% to 300%," said Chatter. "As an example from Google, to be one of the top three advertisers for ‘high yield savings,’ you have to pay $13.20 for a click. With a 1% conversion, it costs you $1,300 to acquire a customer."

"Those are the numbers behind this sale – essentially, it’s lead generation."

 Basically, CPC lead generation is getting so expensive so it’s becoming far more efficient to look to social media as a means for promotion than CPC advertising for lead generation.

Nevertheless, we just want to say to John Wu, you lucky bastard! Congratulations, Cheers!