After $1 Billion Sale to Webhost EIGI, Will Constant Contact Keep Its Soul?

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This morning Constant Contact announced that it had agreed to be acquired in a deal valued at roughly $1.1 billion The buyer is webhosting company Endurance International Holdings Group.

Endurance is focused on the SMB market and has a number of brands including Bluehost, Homestead, Domain.com, Typepad (among others) and now Constant Contact, which immediately becomes the jewel in the company’s portfolio — especially with the new Facebook integration. Beyond that Constant Contact offers a number of other marketing products.

The acquisition makes sense for both companies and positions Endurance to compete directly with GoDaddy and Web.com, which offer a full range of of marketing services beyond webhosting.

The question is whether Endurance will leave the Constant Contact culture intact. If it simply treats the acquisition asĀ  “tool” or a “product” in its broader offering it will see an eventual exodus of customers to other email providers.

Even as some enterprises and brands have shifted focus to other channels like social media, email remains one of the top three or four methods most SMBs use as part of their marketing mix.

The impetus behind the sale for Constant Contact may have been the company’s basically flat share price (it’s up today) and a desire to get away from the mania of quarterly reporting. By the same token, it was pointed out to me, that EIGI was trading below its IPO price.

The company needs to be able to tell and demonstrate a larger growth story to the market (i.e., webhosting + marketing services for SMBs). The visibility and strength of the Constant Contact brand now becomes the biggest single part of that story.

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