Brian Blum
January 29, 2015
Wix is branching out rapidly.
Wix is branching out rapidly.

Stardust Villa Rentals, a small collection of luxury homes near Disney World in Florida, was placing its listings on sites such as Expedia, Priceline and Orbitz to drive bookings – and paying them up to 30 percent of the nightly rate for a reservation – because its own website did not easily allow visitors to search and pay for available rooms.

Now Stardust’s site is fully user-friendly, thanks to Israeli DIY no-coding-required website builder Wix, which in August last year launched WixHotels, a service whereby smaller hotels and vacation-rental owners can compete with the giants of the industry.

Wix launched WixHotels last August.
Wix launched WixHotels last August.

WixHotels was just one of the announcements the Tel Aviv-based company made since its stunning public offering  on the NASDAQ exchange in November 2013, which netted the company $127 million, making it the biggest Israeli IPO since 2007.

Wix’s share price has since plummeted, but the company’s stock is still 7.5 percent above its original listing price. Moreover, revenue in the third quarter of 2014 increased 75 percent from the same period in the previous year, with 2014’s forecast at around $140 million.

And although Wix reported a $12.8 million loss, that hasn’t stopped analysts including JPMorgan Securities from rating Wix shares a “buy, overweight or outperform.”

Some of that optimism is coming from new product offerings like WixHotels, which in turn provide insight into where the company is going post-IPO: an increasing focus on small business and specific verticals.

Ramp up your Wix

WixHotels addresses the roughly 10,000 Wix customers (out of a total of 56 million) who are running hotel sites, and who until now had no choice but to rely on those costly booking aggregators. But a 2013 report by Google found that 65 percent of travelers reserve their accommodations on a hotel’s own site. Why not give smaller hotels the same leg up?

WixHotels is part of the Wix App Market, a growing collection of plug-ins that extends the functionality of websites built with Wix. Some apps are free, others not (WixHotels is priced at $10/month, for example).

There are apps that add live chat, email marketing, ecommerce, calendars, social commenting and customer reviews. The Wix App Market is one of the features that distinguishes the company from competition hot on Wix’s heels, including Weebly and SquareSpace.

Wix director of strategic marketing and communication Eric Mason says the difference between Wix and the competition is that Wix is entirely DIY – with its drag-and-drop interface and integrated apps, users never need call in a pro – whereas other website builders try to upsell outside developer services to create more advanced functionality.

Eric Mason, director of strategic marketing communications at Wix.
Eric Mason, director of strategic marketing communications at Wix.

That’s reflected in staffing: Half of Wix’s 900 staff consists of engineers and designers. “That’s a huge amount of engineering heft you won’t find in other companies,” Mason says.

For the 2015 Super Bowl, Wix is joining SquareSpace and GoDaddy, which also sells DIY website-building software, in placing an ad on American football’s biggest day, at a cost of $4.5 million for a 30-second spot.

Wix makes money not just on its premium apps. While anyone can create a Wix site for free, 1.2 million customers so far have opted to pay $9.99 per month to use a web address without Wix in the URL, or to eliminate the “made with Wix” branding required on the free sites. (At SquareSpace, the same pricing is required for all users after a 14-day free trial.)

Smarter business

WixHotels was just a piece of Wix’s vertical strategy for 2014 and beyond. In October, Wix purchased OpenRest, an Israeli startup that offers restaurant owners a turnkey system handling online menu and order management, along with payment processing.

OpenRest’s developers will become part of the Wix team, allowing restaurants to build more fully functional sites on the Wix platform. And earlier in 2014, Wix bought Appixia, another Israeli startup, which allows websites to build their own mobile apps.

Wix already supported mobile-ready websites, but a standalone app can be an important add-on for many businesses, explains Mason.

“There are a couple of restaurants I eat at all the time. Now they can build their own loyalty apps, so that every time I eat there, I can check in and then they can send me push notifications” on deals and discounts for future visits.

The WixHive is the company’s vision of how it all comes together. Data collected from one app – say, the booking component for a hotel or restaurant – can be used to send out an email newsletter from another Wix app (like MailChimp or the Wix-built ShoutOut). Statistics can be shown on a single dashboard, allowing businesses to get smarter about their online marketing.

Wix has become the poster child for a new generation of Israeli startups committed to staying in Israel. Like Waze, which insisted that headquarters remain in Israel after it was bought by Google, Wix has no plans to relocate to the US. With its self-service approach and no significant on-the-ground sales teams, Wix exemplifies how Israeli companies can compete globally from a Middle Eastern home base.

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