**VERY BIG news in our industry. ** Wagjag and Tuango just announced the acquisition of the assets of DealoftheDay from the Yellow Pages. Where other Daily Deal providers seem to be shrinking, where investment firms and groups want nothing to do with the Daily Deal business, where other deal sites are selling, it seems that for Tuango and Torstar(Wagjag, Jaunt) that is all great news. They, unlike others, are growing and on a buying spree.
Here are the official press releases from both Tuango and Wagjag:
Torstar is no stranger to acquiring companies and this is the third acquisition for Tuango in the last 6 months. They purchased the assets of Le Renard from La Presse; they purchased the assets of RestoBoom from RestoMontreal folks, and now the Quebec assets of Dealoftheday. I believe there may be more coming for Tuango as they continue their expansion. Torstar purchased the remaining assets from Dealoftheday for the rest of Canada. This will also not be the last acquisition for Wagjag. There will probably be more to come as they try and cement their position as the country’s leading deal provider.
If you recall, the Yellow Pages bought the DealoftheDay service when it purchased RedFlagDeals a couple of years ago. Quite frankly, given the reach that Redflagdeals has and the reach that the Yellow Pages has with both merchants and consumers, it is very surprising that they were not able to lead this country with a Daily Deals program. Redflagdeals has millions of consumers and Yellow Pages has relationships with over 300,000 merchants across the country. Why they could not be a leader in this industry does not have anything to do with their reach. But given the Yellow pages’ financial issues, it is not surprising that they wanted to sell this asset amongst others they are selling.They have been looking to sell DealoftheDay for quite some time now.
It will be interesting to see if RedFlagDeals holds on to their Deals aggregator service. It makes sense for them to aggregate given their business model. In fact, I would suggest that they truly promote their deals portal so consumers can see all deals from everyone. Consumers are searching for deals. Given the amount of people that visit both Redflagdeals and the Yellow Pages sites and mobile apps, it would make sense for them to promote Deal Finding and get affiliate commissions from the deal sites they promote. We’ll see how they execute with this strategy.
What does this acquisition mean for the Daily Deal Industry in Canada?
The top leaders in this country have not changed:
Groupon, DealFind, Wagjag, Tuango, Teambuy and Living Social.
But the up and comers sure have. DealoftheDay (Yellow Pages) is now gone, StealtheDeal (Sunmedia) is gone. That makes two media companies getting out of the deals business. There will be more acquisitions announced over the next 6 months that will see other brand name deal sites disappear. A handful we already know about but cannot write about.
Is this healthy for the Deals industry? Absolutely. It gets rid of unneeded competition. The consumer is not as confused and local merchants have less headaches to deal with now that they only have to deal with a few key competitors knocking on their door as opposed to dozens. Acquisitions will continue in Canada. To the point where there will only be 2-3 top sites leading the country, about 15 others in the secondary position, and about 20 -30 others across the country in the tertiary position. Right now there are still 140 or so. (UPDATE: we cleaned up the database and verified some data, there are now about 90 deal sites in Canada. A nice drop from just 6 months ago)
As for Tuango and Wagjag: Congratulations to both on their acquisition. It is the largest acquisition of a deals service in Canada thus far and good to see them collaborating on the acquisition. Tuango truly dominates the Quebec region and I believe will develop into an ecommerce and local commerce powerhouse in that region as well. Wagjag continues its climb as the deals leader in the rest of the country and certainly with Torstar behind it will continue it’s quest at finding further ecommerce and Local commerce opportunities to leverage.