Hydra For Sale?
Just when you thought Nickycakes’ last post on Hydra Network wasn’t fun enough, it seems a giant can of gasoline has been chucked into the fire.
As per usual, a little backstory (it would help if you first read the link above, which will fill you in on even more backstory):
At the beginning of the month, Hydra dumped roughly 12,500 affiliates from their network for “inactivity”. This, as anyone would expect, created a bit of a stir. People don’t like having their accounts shut down. All networks do it though, mostly because inactive accounts are often sold to overseas fraudsters, but 12,500 was nearly 90% of their affiliate base. So, of course, Hydra was contacted by many of the inactive pubs to ask why.
Hydra responded that they were attempting to change from an open network to an “exclusive” one with high quality publishers. You can read their response on wickedfire forums here:
Well, that seems reasonable, right? Most networks thrive on mass signups and sheer volume of affiliates to make money, but there’s nothing wrong with trying something different.
It seems, however, that this might not have been the only motivation behind the dumping of all the affiliates.
Hydra Shopping Around
Last week, Nickycakes was informed by a trusted source that Hydra has been shopping themselves to other affiliate networks. Seems they have been cleaning up their network in an effort to sell.
Their financial advisory company assembled a 17 page “Business Summary” which they send out as part of their sales pitch, which includes tons of fun information such as their balance sheets (completely omitting a section for “cash”), hilarious projected earnings, and their plan to use their “custom lead generation portals” like mydegreefinder.com and onlinetaxproducts.com to increase their earnings since they don’t have any more rebill offers.
Download Business Summary Here | Mirror
Read it for yourself, there is quite a bit of info in there.
The question that’s probably on everyones mind: How much? They could probably get a decent amount for their custom tracking platform if they packaged that up and sold it to people, but most potential buyers will probably see through the numbers they have on there, if they’re only shopping themselves to other networks anyway.
And how the hell did you guys spend $22,226,014 in “Operating Expenses” last year. That’s like buying a fleet of 60 brand new Lambos per year, parking them inside your million dollar office, and using their exhaust instead of central heating.
Keep it real.
My affiliate manager threw a big fit because of an article I wrote on a product that I was advertising for them. Something about one little part not being 100% accurate. Then they wanted to boot me from the network entirely after canceling my relationship with the vendor. I joined Azoogle the next day.
22 million wasted? They should be selling an ebook on how to party the fuck out !
not wasted dude… “operating expenses”
Operating Expenses $ 22,226,014 | $ 12,440,199 | $ 14,055,703
Projected over the 3 years, I'm thinking their whole revision and drop of those 12.5k affiliates takes their cost down.
The reason for that is that most of those affiliate accounts are leech accounts for Asian fraud rings where stolen CCs are used on a few accounts a week, and if they get processed, they profit.
They have thousands of these accounts on every friggin' network that pays.
And.. yeah.
I guess I believe it. But I wonder why they're just selling it off. Tired of "[leading] the industry
in a move up-market by evolving the CPA advertising network model".
If you do the math, that’s around $10,000 per year they’re spending on operating expenses per affiliate in their network.
They had negative growth of 20% for two years, yet they are projecting 61% growth in 2011… Fucking hilarious, I love creative accounting!
I just got paid from them so I think they are doing an alright job.
I’ve never heard any stories of them not paying on time. They seem to be solid in that department, although their recent money problems left them very unable to pay according to their CEO. That seems to be cleared up after their restructuring, at least for the time being.
I hate to say I told you so but…
So where are all the 12,500 terminated pubs going? Will this massive outflux cause any issues to other potentially newer networks who absorb these pubs?
You do realize that people are generally signed up to more than 1 network, right? The people they canned were mostly inactive from what I understand.
So your saying I shouldn’t join Hydra? or maybe I should with that nice “operating budget”. LOL
So Cakes, how are their affiliate parties? Do they have Girls Gone Wild catering them or what?
Maybe I’m the nerd in the group but I’ve read a few income statements in my life. “Operating Expenses” is where all there payroll will be deducted – I don’t recall how many people they have working there, but it doesn’t seem that ridiculous if you break that out to include payroll as well as other misc. expenses…
“Employee compensation is the Company’s primary operating expense, projected to account for 65 percent of total operating expenses in 2010.”
So, it would make sense for an Affiliate Network to have such a high operating expense, especially a big network.
Great find on the confidential business summary. Must be an amazing office in Beverly Hills at 25k/mo for 6600sf. I feel for them with 5.8M in bad debt in 09, ouch…
That would be 300k a year just to rent the office space. I hope that place is convenient or at least has a nice view.
Thats what i call massive budget! These guyz are going to make things difficult for newbie affiliates.
So the potential buyer would be acquiring loads of debt, a landing page, their tracking system and projected magic income. And of course a management team that managed to run revenue in the ground while everyone else banked hard.
No wonder they dumped as many affiliates as they could stomach, them talking it up takes up half the summary, spinning it is they only thing they could do given their situation.
This is a big news.
I just heard that Neverblue is buying Hydra. Any truth to this?
I am a small publisher who had joined Hydra and got kicked out by an e-mail stating that I had violated some f—-ing Section 7 of their affiliate terms…
I was shocked and when tried to call my AM who hardly comes on phone or care to reply my e-mails, told me that they were going in another direction and they only wanted to keep Publishers who makes $5000 or more in commissions every month…
Fine I agree with that, your company is going down and probably up for sale is an acceptable story but why put blame of breaking certain sections when I hardly make about $150-$200 in commissions… ???
Also, a commission of $45.50 is still due since then and I have given up hopes of even receiving a check by reading this post and all these comments…
Not every network is fraud and scam but when you have experience like this one must think twice before applying for another account at any CPA network….LOL…..people like me do get scammed every day BIG DEAL ????