Oakley Capital Investments Ltd. (OCL) founder Peter Dubens wants to turn events publisher Time Out into a “Ticketmaster with reviews,” selling tickets and bookings for hotels, restaurants and travel worldwide.
The plan will pit Time Out, which publishes weekly cultural and entertainment guides in 35 cities, against companies such as Groupon Inc., the top online-coupon provider, and Yelp Inc., a local-business reviews website. Time Out’s reviews expertise will entice readers to buy products and services, Dubens, 44, said in an interview at Oakley’s London office this month.
“It’s a very special brand that’s inbred in our psyche here in London, and it’s been in New York since 1996,” he said. “Unlike a Groupon or a deal business, which is basically just shifting out deals to millions of people, Time Out is writing about what’s relevant and cultural in London. Oakley is helping give them the ability to offer those people reading the reviews the ability to stay on the site and book the ticket.”
Oakley agreed to buy a majority stake in Time Out New York this year to complete its investment in Time Out London, and help the listings publisher expand online. The daily discounts market could be a $3.9 billion business by 2015, up from $873 million last year, according to researcher BIA/Kelsey.
Time Out already provides online daily deals in cities including London and is looking to add websites for other cities. The company has the potential to become “much, much bigger,” Dubens said.
Groupon, which is preparing for a $750 million initial public offering, pioneered the online daily deal business in 2009. Since then, a “substantial number” of competitors have joined the field, according to a filing linked to its IPO. Facebook Inc., Google Inc. (GOOG) and LivingSocial are among its major domestic rivals, according to the filing.
Julie Mossler, a spokesman for Chicago-based Groupon, said the company offers merchants everything from web seminars to case studies to return-on-investment calculators.
“There’s room for more than one site in this space, but this is what makes us unique,” she said.
Groupon turned down a $6 billion takeover from Google last year. LivingSocial, the second-largest website devoted to daily coupons, is selecting investment banks for a $1 billion IPO, a person with knowledge of the situation said last month. Yelp, which sells ads next to reader reviews, is exploring an initial public offering.
Time Out’s strong brand may not be enough to convert readers into customers, said Dan Cryan, senior broadband analyst in the London office of IHS Screen Digest. Amazon.com Inc. (AMZN)’s skills with CDs and DVDs haven’t helped it make much headway against Apple Inc. (AAPL)’s iTunes selling digital music, he said.
“This is far easier said than done,” he said.
Time Out is expanding from 35 cities to 50, adding places such as Berlin, Los Angeles and Miami, and it’s beefing up mobile-phone applications that will offer discounts in specific areas of the cities, Dubens said.
Beyond Time Out, Oakley is interested in acquiring European or U.S. companies that sell products or services or supply advice to consumers over the Internet, Dubens said. The price target is up to 60 million euros ($85.3 million), he said.
Dubens said Oakley hopes to close a deal by September for a European online classified company that operates in 28 countries. He wouldn’t give a price estimate.
Dubens said he doesn’t think there’s an Internet bubble, but prices are high enough to make acquisitions expensive.
The private-equity firm now has to get in earlier, or find industries in transition, said Dubens, who helped found 365 Media Group Plc, an online gambling and information company sold to British Sky Broadcasting Group Plc (BSY) in 2007 for 102 million pounds ($167 million).
“When people ask me what we do, I say we look for wrinkles, things that are slightly quirky, or slightly more difficult, where we need to roll up our sleeves and help,” he said.
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