Vertical Specialization – I am bullish on the "last mile" of search

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  • on January 13th, 2007

Brad says Vertical Specialization is on sale for $310 million of StubHub. I say Wow! As an investor in GolfNow.com…from your lips…

Major congrats to the management and investors. Tickets is a very crowded, competitive, vertical space and when I read the news, I have to say I was shocked at the price. Ebay has shocked me before. It was pleasant shock with their purchase of Rent.com (I was an investor).

My wife was on the StubHub site a few weeks back looking for tickets to a “High School Musical.” She ended up on Ticket Liquidators, the day of the show, buying and printing the tickets. She did not like StubHub, but loved the experience at Ticket Liquidators.

I do many things online, but buying tickets has never been my thing. I have a local contact. I have a Blackberry and a list of friends that I call to beg. It has worked well enough for me.

I am no visionary, just a trend follower, but the “last transaction mile” makes sense to me. There are going to be hundreds of acquisitions of vertical specialization companies in the coming years. I hope/suspect that Google and Yahoo will be the big acquirors. Let me explain…

During the late stages of the Nasdaq boom, talk was of “the last mile” as Qwest, Global Crossing, Worldcon :) . These telecoms argued that if you controlled the last mile (connection to the home), you controlled the market. That was a lot of hype. The costs of building the last mile put most out of business. It could have been the cool acconting as well.

Fast forward to 2006. The bandwith is cheap and Internet search is the most valuable business in the world.

It makes sense to me that the last mile of Search is the holy grail. The last mile of search is a goldmine – especially when it leads to a transaction.

Let’s look at Golf as an example (duh!). If I am searching for a golf course – let me book a tee time or see all the others in the area.

Yahoo and Google seem content to leave this area alone for now. I think that will change very quickly. Those that can build out a nationwide business in vertical markets are going to be very well rewarded.

On behalf of GolfNow.com we are accepting bids for $100 million to enter the vertical market of golf tee times :) . You get a great middleware solution as well. Bargain.

Disclosure – Long Yahoo and an investor in GolfNow.com

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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