PlayerSearch Blog

by Ted Kasten, Founder of PlayerSearch

AOL Acquires Fantasy Football Site

AOL has been aggressive with its efforts to dramatically grow its unique visiters before it spins of its advertising platform. Apparently AOL has now set its sites on growing its fantasy sports traffic with a tiny (by AOL standards) but important acquisition of Flea Flicker as reported by Michael Arrington at TechCrunch.

AOL has partnered with Fanball for their fantasy football league commissioner in the past…apparently they want to own the property now. Flea Flicker is a good acquisition for AOL…it has a great user interface and is very easy to use and understand. AOL just needs to make it scale. I imagine they bought it for an attractive price for Flea Flicker but dirt cheap for AOL’s standards (Can a company that size write checks for less than a few million?!). This was the best, and possibly only, outcome for Flea Flicker. It is near impossible to build a new league commissioner site at this point. The market is filled with great sites from household brands that offer everything for free (Yahoo, ESPN, CBS to name just the top three…Fox and NBC actually broadcast NFL games and they still can’t compete with the top three; Fanball, RTSports and MyFantasyLeague are also dominant players). Flea Flicker seems to have a very easy to use site, with some pretty cool features, which is ideal for AOL. Flea Flicker had a great product, but not a great business. Both sides win here. Smart move by Ori. 26 and already sold a business to AOL…life is good!

Update:

Here is my guess on valuation:

A per subscriber valuation probably doesn’t make sense in this case as AOL was buying the technology not the customer base. So this was a build vs. buy valuation…Flea Flicker has a great site (I am not just being nice, I think Flea Flicker does a great job of making a complex service easy to use and it adds some cool features that I wish my league management sites would include!). Unfortunately for us entrepreneurs, great features with no IP protection are easily and quickly copied in the Internet world…If AOL launches this site as their own, I would bet we see some of the unique features of Flea Flicker appearing on other league management sites very quickly. So…with no proprietary technology, AOL could have built the site with 2-3 developers over about two years…at $150,000/developer (this is an all in cost to AOL including office space, healthcare, etc.; not just the salary) that is $600,000-$900,000 over two years to do it in house. I imagine AOL would be willing to pay more than their internal cost to save time to market and management hassles/risks of finding developers with the right expertise and knowledge (which they got with the acquisition). My guess is that Ori earned close to seven figures in addition to a dream job at AOL and incredible addition to his young resume.  AOL now has the foundation of a great league commissioner tool that it controls and owns.

Advertisements

April 25, 2008 - Posted by | Acquisitions, Uncategorized | ,

1 Comment »

  1. […] Coverage: AOL Acquires Fantasy Sports Site Fleaflicker (TechCrunch) AOL Acquires Fantasy Football Site (PlayerSearch […]

    Pingback by RotoNation » AOL Acquires Fleaflicker | April 25, 2008 | Reply


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: