Co-founder and Chief Operating Officer Scott Dudelson tells me that there’s clearly money to be made in affiliate shopping programs, but Swagbucks has held off, and instead built “a large reputable loyalty brand around other Internet activities.” It has also built a profitable, bootstrapped business, with $23 million in revenue last year (not including the shopping launch, he says the company is on-track for $30 million in 2012) and more than 5 million registered users.
Still, shopping is a good fit for the Swagbucks audience, which Dudelson says is dominated by moms — “the mommy bloggers, the coupon cutters.” (When I last spoke to Dudelson, he contrasted Swagbucks with a social rewards site like Lockerz, which aims at a younger audience.) The new service is an extension of the general Swagbucks concept — you start at the Swagbucks shopping site, then follow a link to one of the partner stores, and you earn a certain number of “swag bucks” (which can be redeemed for rewards) for each dollar you spend. For example, you earn 2 swag bucks for every dollar you spend at Walmart.com, and 4 swag bucks per dollar at Sears. Swagbucks, meanwhile, makes affiliate revenue from your purchases.
Dudelson says this should disrupt affiliate shopping sites like Ebates and Fatwallet, where users get cash back on their purchases, because at Swagbucks, the experience isn’t limited to shopping, but is instead part of a larger rewards program. The company also plans to add more social features and the ability to gift “swag bucks” to other users.
Swagbucks has been beta testing the new service with a limited group of users, and launched for everyone this week.