|Type of site||review site|
|Alexa rank||11,615 (December 2013[update])|
Epinions.com is a general consumer review site that was established in 1999. Epinions was acquired by Shopping.com (known as DealTime.com at the time of the acquisition) in 2003, which in turn was acquired by Ebay in 2005. At Epinions, visitors can read reviews about a variety of items to help them decide on a purchase or they can join for free and begin writing reviews that may earn them money and recognition, according to the site's FAQs.
Epinions was founded in 1999 during the dot-com bubble by Nirav Tolia (who left Yahoo and $10M of unvested shares), Naval Ravikant (formerly of @Home where he left $4M in options), Ramanathan Guha (from Netscape by way of AOL where he left ~$4M in stock options), Mike Speiser (formerly of McKinsey), and Dion Lim (formerly of Morgan Stanley) with $8 million in seed financing from venture capitalists Benchmark Capital and August Capital.
By January of 2003, Epinions had received $45M in funding. It had 5.8 million users, but all of the founders other than Tolia had left, and the company had just started to make a profit in 2002. In the words of Tolia: "We felt we couldn't finish what we started because we had a little problem. We needed a viable business model."
In 2003, the company Dealtime acquired Epinions for an undisclosed amount of stock and Tolia became the CEO of the new company, Shopping.com. The four co-founders who had left consented to the deal, which rendered their shares worthless. Shopping.com had an initial public offering on October 30, 2004. At the end of trading that day, Shopping.com was worth $750 million; the two VC firms' shares were worth ~$60M, and Tolia's shares were worth ~$20M.
In January 2005 the four cofounders who had left and other Epinions employee-stockholders filed a lawsuit against Tolia and the two VC firms that provided seed funding. The suit claimed that "the defendents withheld 'material facts concerning Epinions' financial affairs,' including news of a deal with Google that the company knew would increase its 2003 profit by 1,400 percent." The case was settled by December of 2005; financial terms were not disclosed.
Early in 2000 the San Francisco Chronicle interviewed co-founder Mike Speiser and early member Brian Koller, with Speiser claiming the system prevents advertorials from getting exposure, but Koller saying: "There is a lot of 'You scratch my back, I’ll scratch yours,' and mutual admiration societies. You recommend me and mine, I’ll do the same for you."
The site was also recognized in 2007 by the "Internet for Beginners" writer for About.com as one of the web's 10 most valuable web sites. Calling the site "wonderful", "Internet for Beginners" Editor Paul Gil wrote, "This is a truly valuable resource for the smart consumer." . The praise was echoed by a CBS television affiliate in California that named Epinions its "Site of the Day"
- "Epinions.com Site Info". Alexa Internet. Retrieved 2013-12-01.
- Epinions.com - FAQs: Earnings on Epinions
- Po Bronson for the New York Times Magazine. July 11, 1999. Instant Company
- Gary Rivlin for the New York Times. January 27, 2005 Epinions founders say they were bilked
- Saul Hansell for the New York Times. March 12, 2003. Dealtime Agrees to Buy Epinions
- Gary Rivlin for the New York Times. November 1, 2004 The I.P.O. Succeeded. Who Was Rewarded?
- Mark Boslet for Dow Jones News. December 8, 2005 VCs, Epinions workers settle high-profile legal dispute
- Staff, New York Times. June 3, 2005 Ebay buys Shopping.com
- Staff, Silicon Valley Business Journal. Aug 30, 2005. eBay completes acquisition of Shopping.com
- Epinions.com - Feedback:
- San Francisco Chronicle Jan 22, 2000 - EVERYONE'S A CRITIC: A Worthy Epinion Can Earn You Some Cash