Yahoo!7 has acquired Australian online group buying site Spreets in a $40 million deal, which will see the site move away from its city-by-city focus to offer more localised offers.
The agreement, which includes the site's New Zealand operations, will see the site integrated into the Yahoo!7 Network as well as its joint venture partners Yahoo! and the Seven Media Group, including marketing and promotions.
Spreets has been in operation for almost a year and claims to have 500,000 members, with 274,000 vouchers purchased since launch. It is one of the five biggest sites of its kind, along with Jumponit, LivingSocial, Nine Entertainment Co.-owned Cudo and Scoopon. Spreets has 52 members of staff and said it was planning to add more following the deal.
Deal sites have been touted as the next internet gold rush, with small businesses using the power of the crowd to pull in large numbers of customers without using advertising.
The rise of deal sites poses a significant threat to Google and other search engines, which generate millions of dollars on the back of online ads placed by restaurants, entertainment companies and tourist destinations, and other small businesses.
Their popularity led Google to offer $US6 billion last month for Chicago company Groupon, while at the same time Amazon invested $US175 million in LivingSocial, the world's number two player.
Chief executive of Yahoo! 7 Rohan Lund said: "After carefully reviewing the market it was clear that Spreets is a market-leader in what is becoming a highly competitive and fast growing market. The Spreets management team in Dean McEvoy and Justus Hammer come with strong expertise and experience in the Australian Group Buying market.
"At its core Spreets is about leveraging insights to deliver the best local deals through an online social experience, and this maps perfectly to the Yahoo!7 Local and Social strategies. The acquisition of Spreets means we can bring the best of Yahoo!7 to grow the business even further."
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