Building Websites Strictly for Big Budget Acquisitions

[$$DerekDavis$$]

So I recently had a short discussion with Kaedus about building websites strictly for acquisitions AND being funded for it. Let me explain.

So right now I work with two investors. Our main business model is this:

- Find big/medium companies with stock holders, who's has a main objective is to sniff out competition, buy them out, and act like it never happened (think ebay).

- Have a designer create some layouts (they have to be completely legit, or it won't work - it can't be any type of templated bullshit) that would compete with the "big company" Business model. The threat alone of losing traffic, customers, or having a competitior do something better than them is a threat.

- Send out press releases through 3 of the major Press Release websites (PRWeb.com, and do the research for the other two). This catches the attention of the big website. We do send a press release out every 2 weeks to continue the buzz, and to portray we're a huge company, backed by a huge budget.

- Business plan and all assets (through a legit legal process) get acquired by the big company, sign a 7 year non-compete agreement.

Here's what i'd like to know....is anyone else doing this? Would you like to share ideas on companies to go after? Our last attempt was pretty successful, but not a huge score. We went after a freshly IPO'd company and was acquired for a decent amount and we invested about 12k into generating all the buzz. I know we're on the right track, but we're looking into the bigger fish.

Ebay is still doing this (acquiring companies and deleting their Intellectual property). Amazon stopped 2 years ago. Match.com currently (this is hear-say) looking to acquire two smaller companies, and one of them isn't even built yet!

Have you guys ever tried to create a website, strictly to be used as a ploy to get acquired? I'm thinking of doing a case study with the next round of funding we get - would this be something anyone would be interested in?

Of course we're not going to give out trade secrets, or resources of how we find these companies (UNLESS PRIVATELY) but we are looking to "expand our knowledgebase" if other people would like to get in with us, and trade resources.

PM me privately to find out more info (if you have any resources to exchange), but what we're really looking for is if anyone else is doing this, and possibly we could team up or something to go after a bigger company. We have a list of about 8 more companies to go after - after that, the list starts to get thin.

Any ideas/feedback is appreciated.

 

[$$DerekDavis$$]

Oh, and I forgot to add:

Companies with Stock holders (Internet companies we're talking) usually have some type of acquisition budget on the books. I know it's not called that, but Ebay is one of the main players who continously adds a percentage to this account month over month.

 

[soulbyproxy]

- Find big/medium companies with stock holders, who's has a main objective is to sniff out competition, buy them out, and act like it never happened (think ebay).


Any ideas/feedback is appreciated.

Kind of hung up on evaluating this as I can't figure out what the hell it means.

 

[$$DerekDavis$$]

Kind of hung up on evaluating this as I can't figure out what the hell it means.

What I mean is that Internet companies who grow so big, with millions in funding get scared of competition. Think about it like having a #1 ranking, and getting dropped down to page two. You lose income, visitors etc. These companies work in the same way. At the first sign of competition, stock holders don't like it, and the company usually buys the "competition" if they see it as a threat.

 

[TechS]

interesting idea. ethically eh.
would the websites actually be functional?

I'm assuming it would cost huge money to develop a site like ebay for example to be even remotely functional.

Don't you think these companies your targeting are going to be atleast smart enough to check the website out and see that it is not functional/doesn't have any user base?

If you are going to be putting that level of effort and funding into it you might as well try to create a legit profitable website in the meantime.

To be honest I think this idea definitely has some potential but would not be something I discussed publicly.

 

[$$DerekDavis$$]

Actually, we already had success. The website was NOT functional, but we did have about 14 designs created for major pieces of the site, as well as a full business plan.

As far as companies acquiring without research, I agree with you on that. That's why, if/when we go after much bigger companies, the website would (in my mind) at least have to be in a beta stage.

As far as the statement about create a legit profitable website, that was our back up plan from the start. We had about 25k in funding to use, and we used about 12k of that before the company contacted us.

 

[kingfish]

It seems to me if they're scared early and you already have a business plan the longer you hold out on being sold the more money you will make. I suppose your budget is small but it sounds like what you're doing is going through the part of a startup that is the most difficult and least profitable then selling right before your evaluation would actually explode.

 

[$$DerekDavis$$]

It seems to me if they're scared early and you already have a business plan the longer you hold out on being sold the more money you will make.

That's the same thing we thought, but we didn't want to over do it on our first "go" at it.

 

[soulbyproxy]

What I mean is that Internet companies who grow so big, with millions in funding get scared of competition. Think about it like having a #1 ranking, and getting dropped down to page two. You lose income, visitors etc. These companies work in the same way. At the first sign of competition, stock holders don't like it, and the company usually buys the "competition" if they see it as a threat.

First off, these companies are where they are because they provide value to their customers. whether or not the the strength of that value is questionable, it is entrenched, and designed to stay that way.

Using your example ebay: you're business plan is to develop a model that better than ebay, so much so that they perceive it as an actual threat and then sell out to ebay?

lol wut?

Not only this, but you plan to do this across several sectors and companies.

Sounds good, but that first step is a killer. All you have to do be better than the best companies in their sectors at what they do and release a few press releases about it.

If you had the ability to do this then you probably wouldn't need to. Try developing one company so that a first tier enterprise sees you as a threat, and see how that goes.

These companies do due diligence before they do anything, so whats most likely to happen is that they'll send out some press releases of their own labeling you as a serial bullshiter.

The media does due diligence as well. You think that the WSJ or NYT is going to pick up a story about the "next ebay" because of a few press releases?

You're going to need to move some units first my friend.

Oh, and your giving the impression that you're "backed by a big budget" idea, are you fucking serious? You're going to end up in prison if you keep going at things this way.

 

[TechS]

Actually, we already had success. The website was NOT functional, but we did have about 14 designs created for major pieces of the site, as well as a full business plan.

As far as companies acquiring without research, I agree with you on that. That's why, if/when we go after much bigger companies, the website would (in my mind) at least have to be in a beta stage.

As far as the statement about create a legit profitable website, that was our back up plan from the start. We had about 25k in funding to use, and we used about 12k of that before the company contacted us.

Honestly dude, at this level of investment your primary goal should be to make a functional, profitable website. Invest in yourself, not in a bet you'll get noticed and picked up. The acquisition should be the bonus.

It will increase the value of the websites substantially if you did get bought out anyway

 

[$$DerekDavis$$]

First off, these companies are where they are because they provide value to their customers. whether or not the the strength of that value is questionable, it is entrenched, and designed to stay that way.

Using your example ebay: you're business plan is to develop a model that better than ebay, so much so that they perceive it as an actual threat and then sell out to ebay?

lol wut?

Not only this, but you plan to do this across several sectors and companies.

Sounds good, but that first step is a killer. All you have to do be better than the best companies in their sectors at what they do and release a few press releases about it.

If you had the ability to do this then you probably wouldn't need to. Try developing one company so that a first tier enterprise sees you as a threat, and see how that goes.

These companies do due diligence before they do anything, so whats most likely to happen is that they'll send out some press releases of their own labeling you as a serial bullshiter.

The media does due diligence as well. You think that the WSJ or NYT is going to pick up a story about the "next ebay" because of a few press releases?

You're going to need to move some units first my friend.

lol. I didn't say we were going after ebay, unless we come up with a concrete business plan. I do know of smaller companies that HAVE went after ebay successfully. The whole point is taking their flaws (in this example, their high fees) and turn it against them. I'll try to find ebay's last acquisitions to give you more insight.

 

[$$DerekDavis$$]

Honestly dude, at this level of investment your primary goal should be to make a functional, profitable website. Invest in yourself, not in a bet you'll get noticed and picked up. The acquisition should be the bonus.

It will increase the value of the websites substantially if you did get bought out anyway

Very good point. The sad thing is that after our first attempt, it DID in fact work as far as the goal we were going after (to get acquired).

We do have a backup plan, which is usually to just build the website out, use the funding to market the site, go after some tough keywords, etc. Our main goal would always be the easy way out (which is what everyone wants) which would be a quick acquisition.

 

[$$DerekDavis$$]

Ah! Found one.

eBay Inc. - eBay To Acquire Ibazar S.A.

This company was bought out by ebay. (eBay: Redirect) because of competition on France.

They deleted the site, all the IP info, and redirected the site back to Ebay.

Edit: The company name is iBazar.com as you can see above, they redirected to ebay.

Double Edit: Here's another company: Baazee.com <= they did the same thing to this company as above.

 

[soulbyproxy]

lol. I didn't say we were going after ebay, unless we come up with a concrete business plan. I do know of smaller companies that HAVE went after ebay successfully. The whole point is taking their flaws (in this example, their high fees) and turn it against them. I'll try to find ebay's last acquisitions to give you more insight.

Find me a company that turned 25k into a multi million dollar acquisition by ebay and never sold a product or met a real need.

Aquisitions arent made soley because of fear, theyre made be cause of value. I aquire you I get your staff and IP. Problem is you have no staff except a web designer, an seo and a guy who sends out press releases every two weeks.

I'm at ebay and I'm in charge of acquisitions so I look for tax records , public records and financial information.

Hmm I see that these guys are based out of a PO box in east bum -fuck. Oh look, they bought a power mac last year. This one guy bought an Armani suit and a par of Raybans and charged it to the company.

Better buy em out...

Seriously, put whatever you're high on right now in a bottle, and start selling it. I need some of that.


You wont pass a sniff test.

 

[$$DerekDavis$$]

Find me a company that turned 25k into a multi million dollar acquisition by ebay and never sold a product or met a real need.

Aquisitions arent made soley because of fear, theyre made be cause of value. I aquire you I get your staff and IP. Problem is you have no staff except a web designer, an seo and a guy who sends out press releases every two weeks.

I'm at ebay and I'm in charge of acquisitions so I look for tax records , public records and financial information.

Hmm I see that these guys are based out of a PO box in east bum -fuck. Oh look, they bought a power mac last year. This one guy bought an Armani suit and a par of Raybans and charged it to the company.

Better buy em out...

Seriously, put whatever you're high on right now and start selling it. I need some of that.


You wont pass a sniff test.

Lol. You trollin' right? Once again, I never said we was going after ebay-big websites. Though, I appreciate your input.

 

[eliquid]

Ive actually seen this done, but more often then not I have seen it done with bigger companies buying out the smaller companies and then signing on the talent ( people ) to work for the larger company and not just a buyout with a NDA/NonCompete.

If you can pull it off, great. I think its legit actually. I've seen this happen, though slightly different.

 

[$$DerekDavis$$]

Ive actually seen this done, but more often then not I have seen it done with bigger companies buying out the smaller companies and then signing on the talent ( people ) to work for the larger company and not just a buyout with a NDA/NonCompete.

If you can pull it off, great. I think its legit actually. I've seen this happen, though slightly different.

Yup, you're actually right. These acquisitions happen much more often. Like, Google acquiring FRIDGE for google+.

 

[greenleaves]

Yup, you're actually right. These acquisitions happen much more often. Like, Google acquiring FRIDGE for google+.

Make it more appealing. Get some patents going. Hire some 'stars'. They don't actually have to work for you, just be 'in on it'. Make a bunch of noise when you do so. Aquire other companies (they can be set up by people you know )

Also, find what the CEO wants. Say the CEO wants to go after the 'south pacific market'. Well, make your site go after the south pacific market. Not only do what they do, do what they want to do.

Depending on how aggressive you want to be, put out press releases that you are in talks with selling out to {insertthecompetitorofthebusinessyouaretargeting}

More ideas: Find out where their CEO goes. Then send undercover people to 'spread the word'. So say you find out the CEO of XYZ goes to Fit Simmongs on 1 street, a avenue. Well, have some people go there and casually have a conversation of how awesome your site is, and how they stoped buying from XYZ company after that. Buy advertising wherever he goes. He will think of your popularity not based on the true popularity, but based on how popular he PERCEIVES it.

Find out the favorite {basketball player/football player/singer/etc} of the CEO/board of directors/coo/cfo/etc and hire them as an endorsement.

Maybe hire an insider; the CEO's assistant, and get them tell you stuff. Find out who is against the deal if it get's discussed. Pit them against each other. Start rumors.

Find out who the wife of the CEO is. Then make her use your site, maybe even hire her.

And for God's sake; don't put everything you do in writing. Somethings can just 'happen'. No need to created documented written evidence that can latter be used to rape you.

There are so many guerrilla marketing techniques that can be applied here it isn't even funny. And remember, you are not going after a company, you are going after the individuals that control that company.

 

[cheshire]

This works, my uncle does something similar in the offline world. Turns a few million a year at it.

 

[$$DerekDavis$$]

Make it more appealing. Get some patents going. Hire some 'stars'. They don't actually have to work for you, just be 'in on it'. Make a bunch of noise when you do so.

Also, find what the CEO wants. Say the CEO wants to go after the 'south pacific market'. Well, make your site go after the south pacific market. Not only do what they do, do what they want to do.

Depending on how aggressive you want to be, put out press releases that you are in talks with selling out to {insertthecompetitorofthebusinessyouaretargeting}

More ideas: Find out where their CEO goes. Then send undercover people to 'spread the word'. So say you find out the CEO of XYZ goes to Fit Simmongs on 1 street, a avenue. Well, have some people go there and casually have a conversation of how awesome your site is, and how they stoped buying from XYZ company after that.

Find out the favorite {basketball player/football player/singer/etc} of the CEO and hire them as an endorsement.

Maybe hire an insider; the CEO's assistant, and get them tell you stuff. Find out who is against the deal if it get's discussed. Pit them against each other. Start rumors.

Find out who the wife of the CEO is. Then make her use your site, maybe even hire her.

And for God's sake; don't put everything you do in writing. Somethings can just 'happen'. No need to created documented written evidence that can latter be used to rape you.

There are so many guerrilla marketing techniques that can be applied here it isn't even funny. And remember, you are not going after a company, you are going after the individuals that control that company.

I just rep'd you so hard lol.

Excellent ideas. As for the business plan, we actually have TWO: One between me and the investors, and one for the website (so we won't get raped).

Overall, I first experience generated a profit of about 24k, and about 3 months worth of work. Now, we're working on streamlining, and of course, useful ideas as well.

Thank you for the useful post greenleaves, much appreciated.