Quinstreet acquired insurance.com for $35.6m and referred to the acquisition as a “media asset”, and that it was a web site, media, and technology asset.
Insurance.com was previously run as an insurance agency, actually selling some policies direct to customers. Quinstreet did not buy the agency, contrary to earlier reports and did not layoff anyone because of the acquisition; the report of layoffs was from the owner of the agency, which Quinstreet did not acquire. Quinstreet usually doesn’t acquire “revenue” in acquisitions. It says it “buys media and then turns it into revenue”. The average cash-on-cash return for acquisitions is 35% at the company. The insurance.com transaction would return 20%-30% on the company’s conservative acquisition model, although Quinstreet says it’s blowing through that number. In response to an analyst question “aren’t you just buying the domain name”, Quinstreet responded “this is not a domain name”. It wants to build on the existing content and platform.
Bottom line: Quinstreet bought a web site that has a domain name full of potential associated with it. That domain name is one of the reasons Insurance.com is what it is today. The acquisition occurred this summer 2010, a few months after their acquisition of insure.com for $16m. According to Domain Name Wire the domain is speculated to be one of the most valuable in history, more than sex.com.
