Iron Curtain Lead Generator Struggles
John DeMayo, a startup consultant and former ad.com exec, had the scoop that HouseValues would acquire TheLoanPage for “mid seven figures”. Today Housevalues announced the acquisition but failed to disclose the price.
Assuming DeMayo is right, the sale would mean a loss for Battery Ventures, who bought the firm last year for $10m and moved it out West. At the time they installed another former ad.com exec, Stein Kretsinger, who was an entrepreneur in residence at Battery, to run the firm.
The Loan Page is what I would call an Iron Curtain Lead Generator. They get the consumer to fill out a form expressing interest, package it up and then the consumer gets a call from a number of people they don’t know in a short amount of time. It’s hardly a stellar customer experience.
There are even firms like Double Positive that sit between people like The Loan Page and the lender to cleanse the leads. After they have a person that really is interested in speaking with the advertiser they pass them on, charging $79 each time they do that (average lead price for mortgages is ~$20-30).
It seems like no one is winning. Bad experience for the consumer, ordinary experience for the advertiser. The Loan Page was obviously not doing too well at it, but on the other hand HouseValues has been doing a great job of it (stock ticker: SOLD).
Still, I really believe that there is a rich opportunity in empowering the consumer with data in these situations and most importantly putting them in control of the contact. Being hassled by an unknown person is not a good premise for your business. Further, pay per call pricing allows a publisher to put the consumer in control and still make money. That’s part of the core ethos of Homethinking.
Which by the way, I should have something to show you in a few weeks, if you are interested. It’s a very exciting time at the moment for me and I couldn’t be more fired up.
UPDATE: Housevalues did disclose the price in an 8-K filing. For those keeping score: $5.25m in cash and the assumption of $1.8m in debt, meaning that Battery did in fact lose money (although not really that much) on the transaction.
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