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A look back at the sale of Wowhead.com

Now that we've had a few days to think about it, I think it's worth taking a bigger look at the Wowhead acqusition news that broke over the weekend. On Friday evening, a blogger named Ahmed Farooq posted that as a person who'd previously worked to acquire websites for goldseller IGE, he'd heard from "three different sources," all unnamed, that Wowhead had sold to Affinity Media for $1 million. That's when we reported on it, and more than a few other sites also picked up the story. We also were one of the first sites to report in conjunction that Affinity Media had supposedly sold IGE, and claimed they were no longer in the business of goldselling.

On Saturday, Wowhead posted a confirmation on their site, and then this Q&A with their CEO and the head of Affinity Media, John Maffei. They claim to be "100% sure" that since Affinity reportedly sold IGE, Wowhead will never carry gold ads. Farooq, the original tipster, posted an update on his site that says Affinity was "still very much involved with IGE," but Wowhead's Q&A says "the individual who leaked the story about the Wowhead sale" (apparently Farooq) also "owns competitive content properties," including a real-money trading (goldselling) site, and calls the act of that person spreading rumors about Wowhead "the height of hypocrisy." By all appearances, Affinity Media is no longer associated with IGE at all, and at the moment, the proof is in the pudding: there are currently no gold ads on Wowhead or Thottbot.

As for IGE, this report about the CEO at the Virtual Goods Summit makes it seem as though there are stormy waters ahead for their company and the entire gold selling market.

He says that as the gold market gets popular, prices drop because competition keeps growing. It's inflation on a basic and expansive level-- gold is relatively easy to farm, and so the more people you have selling it, the cheaper and cheaper it will get. Eventually, prices drop so low that even in China, you simply can't afford the labor involved. The downfall of the gold industry may simply be a combination of its popularity and Blizzard raising the level cap, and thus adding more and more gold to the ingame economy. When even gray items sell for a couple gold each, gold just isn't worth that much anymore, and so it becomes that much harder for goldsellers to make the same profit margins.

As for Wowhead, even if they are free of goldsellers (and it does seem like they are), it's a whole other issue that all three databases are now owned by the same content network. Arguably, Wowhead's success came about because it wasn't owned by Affinity, and Thottbot and Allakazham were-- they were forced to implement a sharper design and better technology in order to pull readers into an all new database site. Their traffic from Alexa (admittedly, Alexa is not the best source of information for web traffic, but at the moment it's our only source) for the past year shows that the Burning Crusade release (that nice big bump up in January) was what put them over the top.

Then again, maybe there is room for both sites in the network-- Thottbot shows the same growth over the BC release, and while they have dipped a little bit, Wowhead's growth hasn't appeared to cut into Thottbot's much at all. It seems players aren't visiting one site exclusively over the other-- they'll take their information where they can get it.

Still, competition always helps customers-- if Wowhead and Thottbot aren't required to compete, we may not see the rapid growth of features that Wowhead has become known for. We do congratulate the Wowhead guys for making good-- as Tobold says, $1 million is hard to pass up, and Wowhead has worked hard for their money. But a lot of players are concerned, rightfully so, that having all three databases inside one stable might mean the horse race for customers' attention may be over.

Filed under: Items, Analysis / Opinion, News items, Economy, Guides

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