TRAVELtech: Stayz doing more than $100mm a year. Now valued at $36mm according to Fairfax

James Cassidy - the General Manager of Australian vacation rental listing site Stayz - put a rhetorical question to the Audience. Was it worth it for Fairfax Digital to buy Stayz.com.au?

Fairfax Digital Media bought Stayz back in 2005 for $12.7 million. Cassidy claims that if the same multiple at the time of acquisition were applied to current revenues then Stayz would now be worth $36mm. Here are some of the statistics he shared with us about the business:

• 2007 Transaction Value - $107mm (value off bookings generated for owner/listers);
• Grown from 9.000 properties to 23,000 properties; and
  
• site re-launch generated conversion improvements of 30-40%.

The other interesting comment was that Fairfax Digital had spent a lot of time building a network of links and cross referral points with other sites in the Fairfax Digital network (like newspaper Sydney Morning Herald and vertical classified sites like Domain.com.au). He admitted that this is not about traffic generation. In fact the traffic generation of from these links is very minimal. Instead the value was in the SEO consequences. The network of links from high traffic sites performing different but at least contextual activities is crtical to the SEO activities of Stayz. Cassidy is claiming 80% of the Stayz traffic comes from free/organic search. Supported dramatically by the link network effect of Fairfax Digital.

Assuming this is right it is an amazing story behind media group network effects. That internal banners and buttons and not what the network is about. Instead it is the html code driving links and search traffic. Sounds very close to some of the grey/blackish hat activities I have seen online from travel affiliate companies.