Comment by aresant | Hacker News Reader

Comment by aresant | Hacker News Reader

Here's what I think happened:

a) Xhibit has built a solid digital agency team on the back of nutraceutical affiliate marketing offers, and enough revenue to support a trailing $300 - 500m valuation. But they realize their business isn't sustainable, and want to unlock the value of their team & experience with a larger play. They have failed at doing this with their own projects.

b) Najafi Companies, that originally owned Skymall, recognizes that the continued move to digital will eventually, and probably quite rapidly, decimate what is effectively a print advertising business in Skymall. They need a forward looking strategy, and a team that can execute said strategy ASAP.

c) Given that both companies are in Phoenix, a fit is recognized, and Skymall's recently appointed CEO Kevin Weiss is named CEO of the merged organizations. They sign him to a 5-year agreement to develop the digital strategy for Skymall and, given his background at "Author Solutions" which shows his experience in transitioning print-to-digital, this makes sense.

d) They hatched this plan when Xhibit's CEO met Skymall's CEO standing in line to use the restroom at a Phoenix Sun's game (a team that Najafi Companies has an investment in).

(1) http://biz.yahoo.com/e/130621/xbtc8-k.html

I'd suggest listening to this interview with the the CEO of Xhibit for even a few minutes to get a sense of the kind of "value" their team is bringing to the table.

http://www.youtube.com/watch?v=bfA165MFcBI

His meandering string of banal platitudes and buzzwords is seriously next level:

"I personally refer to Xhibit as a multi-dimensional digital ad agency. Our gaol was to build a company with combined strengths of design, development, and distribution, to be a one stop shop for a clients digital marketing and advertising needs. Our synergistic array of software suites, tools, and offerings have been engineered from the ground up to help companies maximize results from digital strategies. I really want to emphasize results, Nick. Since we build our concepts from the ground up to help businesses maximize revenue, I always have the belief that if a client made money from a marketing campaign, they will in turn spend more money. This is why we have integrated some performance result models into our work today. The long term success any business or product relies on monetization."

Sounds like he's a living bullshit generator:

http://www.dack.com/web/bullshit.html

I can't help shake the feeling that Chris Richarde started Xhibit as a parody and accidentally found himself swimming in real money.

AKA the LMFAO effect

This isn't that bad. Joel Spolsky points out how bad Steve Ballmer's recent memo was: https://www.microsoft.com/en-us/news/Press/2013/Jul13/07-11m...

Link to Spolsky's critique?

This is the best I could find: https://twitter.com/spolsky/status/355358776280363008

The difference is that that Ballmer is talking about a company with real products that makes billions of dollars, and this guy is talking about a company with no real products and no revenue to speak of.

Microsoft makes everything. Xhibit makes nothing. Their descriptions will be deceptively similar.

> Our gaol was to build a company with combined strengths of design, development

What an appropriate misspelling - gaol is a British term for prison.

https://www.google.ca/search?q=define%3Agaol

More precisely, it's the British spelling of "jail" (and pronounced the same way).

An archaic British spelling of jail, nevertheless.

I don't know if it's next level so much as it is more or less standard verbiage from leadership at the agencies I've worked for.

I've tried to figure out why it is that some of the jargonized business talk seems more concentrated there than other places I've worked -- and the bigger the brand names involved, the more concentrated it seems to get.

My guess when you earn your bread and butter being the third party vendor that management turns to solve their problems, you do better in the marketplace when you speak the language they do.

So much synergy. So much.

Even the photographer couldn't point out that he should fix his tie?

It's just so charming when an interviewee answers by reading pre-written responses in an style that would never be used in a real (even somewhat formal) conversation.

My impression was that "Author Solutions" wasn't about "transitioning print-to-digital", it was about scamming people with aspirations to be authors, by charging them ridiculously large up-front fees for various "services" (often presented as independent providers, but actually usually kicking the money back to Author Solutions) and promising unrealistic results, then walking away with the money after those results fail to materialize.

Here's what I think happened in your post:

a) You made a lot of speculative statements that are based on no facts of any kind.

But it was both fun to read and plausible. I want to know which part the reference at the bottom is attached to.

"enough revenue to support a trailing $300 - 500m valuation"

Did you even take a look at Xhibit's SEC Filings? http://finance.yahoo.com/q/is?s=XBTC - their quarterly finances are a mess.

Skymall may be in a rough place, but the idea this should have been a merger of equals is ... no words. So stupid.

EDIT: Read the executive bios and ask yourself if you'd hire a single one of them to do anything: http://www.reuters.com/finance/stocks/companyOfficers?symbol...

I'd hire their Chief Photography Officer, I'll admit that much.

You lost me at "built a solid digital agency team", and you're using euphemisms instead of just saying "spam". There's nothing solid or legitimate about what they were doing.

hacker news in general seems to have an uneasy relationship with the line between "digital marketing" and "spam". possibly because aggressive email marketing campaigns really do pay off for startups, regardless of how many people they annoy in the process.

They do in the short term, but in the much harder to measure long term, I'm guessing that they do more damage than good. I know many people who absolutely abhor and refuse to ever use LinkedIn thanks to their incredibly aggressive email team, for example, but I'm sure the engagement numbers looked real good when they sent out each of those email blasts.

If "weight loss product, colon cleanser and green coffee supplement" are what they are marketing, a better "harsh" word would be deceptive.

Not only are they marketing deceptive products, they were too stupid to do it successfully and now their merchant accounts are frozen. I choose the word stupid because there is a strong history of the FTC going after other companies selling these exact same products in this manner since about 2009. (The biggest being Jesse Willms, $359m http://www.ftc.gov/opa/2012/02/willms.shtm)

So, yes, Skymall & its original owners got scammed.

Maybe it's simpler than all this. Maybe it's just a front for organized crime. The front of a mob operation won't seem to make much financial sense if looked at too closely, because what's really going on isn't in the reports, and what's in the reports is just for show.

Organized crime? Like financial fraud...

"recognizes that the continued move to digital will eventually, and probably quite rapidly, decimate what is effectively a print advertising business in Skymall."

Skymall has distribution and provides entertainment. (See my comment below about finding a porn magazine in a hotel room vs. online)

Reply on news.ycombinator.com