Alloy Buys High School Social Networking Site

  |  March 29, 2006   |  Comments

Alloy Marketing & Media has acquired Sconex for $8.7 million.

Youth-focused online publisher Alloy Marketing & Media has acquired high school social networking site Sconex for $8.7 million.

The community-based site will give advertisers new opportunities for both display ads and more integrated marketing, such as sponsored tools and content, according to Samantha Skey, SVP of strategic marketing at Alloy Media & Marketing.

"We're looking to use the depth of Sconex's connection with users to benefit both users and advertisers who want to enable them," Skey told ClickZ News. "It means we have to work harder, but it also creates a more meaningful connection."

Skey envisions introducing branded elements like photo-upload tools to the community, giving something of value to users that will more likely drive engagement and encourage users to pass along content, she said. Sconex previously sold ads both via a small in-house sales team and through contextual ad networks AdBrite and Google's AdSense. Alloy's other sites offer a variety of ad units, including several video and rich media formats. They have also been experimenting with social marketing methods, and will do more of that now, she said.

Sconex, targeting 14 to 18 year olds, fills in Alloy's network of youth-focused community sites such as the flagship alloy.com. Other sites include delias.com, which targets 12 to 24 year old girls and young women; the action sports-focused ccs.com, which targets 12 to 24 year old males; and collegeclub.com and careersandcolleges.com, which target 18 to 24 year old college students.

According to Alloy, Sconex has seen a threefold increase in visitors over the past six months, with the average visitor spending 59.8 minutes per day on the site as measured by Media Metrix in February. Most of its growth has come by word of mouth. The company says Sconex gets more than 400,000 unique visitors monthly and has more than 500,000 registered users.

Sconex should benefit from the association with Alloy's offline marketing network, which reaches 60 percent of high schools in the U.S. through in-school billboards, which will be used to promote the Sconex brand, Skey said. Alloy will also promote Sconex to its 7 million catalogs for its Delia's and CCS merchandise brands, and to the 5 million monthly visitors to its various Web sites, she said.

Alloy paid for Sconex with $6.1 million in stock, plus an additional minimum earnout payment of $2.6 million in stock or cash, due in 12 months, and based on certain performance metrics.

Marketers have been trying to figure out how to take advantage of the social networking phenomenon to bring their brand messages to the millions of users of sites like MySpace, Facebook, and others.

The most successful sites have been getting attention from acquisitive media companies lately. News Corp. acquired MySpace's parent in July for $580 million, and Facebook has been on the block for months, with a reported asking price of $2 billion.

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ABOUT THE AUTHOR

Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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