Web publisher SportsLine.com
is acquiring privately-held fantasy sports site Sandbox.com, in a bid to beef up its own online marketing capabilities.
Under the terms of the agreement, a maximum of 1.6 million shares of SportsLine.com common stock and a maximum of $1 million cash will be exchanged for all outstanding shares of Sandbox.com — all told, worth about $2.5 million.
Fort Lauderdale, Fla.-based SportsLine said the acquisition — once it closes in fourth quarter, after receiving shareholder approval and meeting various other criteria — would make it a “direct marketing powerhouse.”
As a result, SportsLine will add Sandbox’s database of five million registered users to its own list of opt-in names and member information from flagship Web site CBS.sportsline.com.
With its $2.5 million price tag, the deal comes as an inexpensive way to buy into what pundits once tabbed as one of the most advertiser-friendly online media plays: the so-called Web community. With a base of frequent users with lengthy sessions, communities like theGlobe.com — where users could trade messages about a particular subject — were considered the killer app.
Now, with that sort of thinking having been shaken to its roots — theGlobe.com said in August that it would be shutting its doors and selling off its properties — SportsLine sees opt-in user data, rather than online media, as the most valuable part of the Sandbox purchase.
“This is an extremely complementary acquisition that will enable SportsLine to accelerate its database marketing efforts and further diversify our revenue base,” said SportsLine founder and chief executive Michael Levy.
Indeed, SportsLine, which had about 4.5 million users as of June, said it’s finding enormous success with its own direct marketing efforts, created in large part through its own, smaller fantasy sports area.
“Fantasy sports … has enabled us to build up a pretty large database, that lets us do a couple different things in terms of opt-in marketing,” said spokesman Larry Wahl. “It gives us an opportunity to go out to our sponsors and advertisers with unique packages, where they can include a variety of direct marketing messages, as part of a sponsorship of our site. It has certainly given our advertising sales team a little bit of creativity in putting together some interesting packages for our advertisers.”
As a result, with clients including Nissan, uBid.com and the National Football League, SportsLine says it can find a better use for Sandbox site’s user base — which incidentally is about the same size as that of theGlobe.com during that company’s heyday.