Fox & News Corp buying risk

It’s been all over the news lately that Fox/News Corp. bought into the Simply Hired job search engine for about 13 million. This has to be one of the surest signs that there is a huge bubble going on right now and it is gonna burst soon. Why?

Simply Hired is an aggregator… All that would have to happen for it to become not relevant is for half of the sites that it “searches” to turn off their feeds. All of a sudden, Simply Hired’s search results aren’t really relevant and nobody uses it anymore. Kind of defeats the purpose if I still have to visit 3 sites to find all the listings anyways. Don’t get me wrong, I have used SimplyHired and I like it. I think it’s a great idea. I just don’t see where it is worth any where near 13 million.

Hey Rupert!!! If you are so ready to throw around your money, I could use a million. That’s it. One million. I’ll sign over all my advertising revenue for the next year for one million dollars. You can even put a little Fox/News corp logo on my site for that year. Any other takers? Maybe I should sell it by the day… $2800 per day. All the revenues from the site are yours. You can slather your corporate logo onto my site.

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About Shane Ede

Shane Ede is an IT guy by day and a Entrepreneurial Blogger by night. You can follow him here on Thatedeguy or over on Twitter and Google+.

Comments

  1. >>”All that would have to happen for it to become not relevant is for half of the sites that it “searches” to turn off their feeds.”

    not likely.

    most people aren’t aware that the distribution of job data is very “long tail-ish”… in other words, the ‘major’ sites most folks think of like Monster, CareerBuilder, HotJobs, and Craigslist do not have a dominant share of the overall job data inventory. Individually, none of those sites have more than 10% market share, and collectively they probably have only around 20-30%. the vast majority of listings are distributed at thousands (if not hundreds of thousands) of less well-known employment sites, job boards, and employer websites.

    furthermore, the trend is moving *more* in that direction — as more employers have jobs on their own websites, and as data becomes more easily indexed, and more niche job boards specialize and verticalize, it becomes less relevant to post in any one location.

    thus, it’s unlikely any of the major sites would “turn off” access to our indexing engine. that’s about as smart as someone blocking the Yahoo or Google crawlers from indexing web page content. we send traffic back to those sources, and since no one controls dominant market share they are likely to see quite a bit of value in having us send relevant & qualified users to their sites. even the big guys.

    and even if they did, it would only affect a fraction of our overall job data. we’re still over 10 times the size of any individual site, and that will continue to increase as more job data becomes distributed in multiple sites & locations across the web.

    regards,

    – dave mcclure
    http://www.simplyhired.com

  2. Thatedeguy says:

    Dave,

    Thanks for stopping by. I have to admit that I didn’t know some of the info that you’ve mentioned. I still have to admit that I am perplexed by the whole thing though. SimplyHired is a ad-revenue site. Meaning that SimplyHired makes it’s money from the ads that show on the site. So, isn’t it potentially a problem that the sites that you are aggregating become a little “testy” about you earning money off of their content? As an example, look at pfblogs.org and pfblogs.com. The numbers for pfblogs.org have grown dramatically while pfblogs.com has whithered because of it’s ad-revenue model. Many of the sites that pfblogs.org aggregates are sites that have ads themselves and have requested to be removed from pfblogs.com as a result of their ad-revenue.
    Isn’t it possible that that could happen to SimplyHired? I can see where the individual companies that are posting openings on their sites wouldn’t have a problem, but the other job search sites, such as careerbuilder, monster, and the individual more local sites as well are often trying to sell ads and such as well. Just seems to me there may be conflicts eventually.

    thanks,

  3. actually, advertising is just the first of several potential revenue streams for us, and not necessarily the biggest potential one.

    but regardless, the model is pretty similar to Google or Yahoo, so not sure why folks would be any more or less offended (not to say some might not express concerns, but likely it’s a minority).

    finally, the same folks who you mention may have concerns are actually our target market for advertising customers. again, if the market is fairly well distributed, and there are people coming to our site who may go to many different source sites, those sites are likely motivated to advertise their specific jobs and/or offerings on our site in order to get more incremental traffic. (note: to clarify, this would not change the order or results of our organic listings, however we would enable options for paid and/or premium listings similar to the way Google and Yahoo handle paid vs organic results at the top and right of search results).

    so while it may be the case that a few sites may opt out, we doubt it will be the case for the majority of folks. in addition, those same sites may see value in advertising to specific nich (or even broad) audiences that happen to be users of our sites.

    in summary, we are more likely to be complementary partners with other job boards and sites, rather than competitors. while there may be some overlap, we believe our services and features will in the future provide substantial value to job boards, employers, and classified sites as much as they do now to job seekers themselves. whether we’re right or wrong only time will tell, but with luck & perseverance we hope to be successful πŸ™‚

    thanks for the opportunity to respond πŸ™‚

    – dave mcclure
    http://www.simplyhired.com

  4. Thatedeguy says:

    Dave,

    Thanks again for responding. It’s the beauty of the digital age that we can have conversations like this. I appreciate you taking the time to respond. As I mentioned in the original post, I have used your site and really do enjoy it. Therefore, I do see the sites ability so succeed and I do believe that it will. I mostly was just questioning the reasoning behind a 13 million investment. More importantly, I was questioning the fact that News Corp obviously seems to think that the ROI will be worth the investment. Either that or we truly are in a bubble again.
    Good luck with the site.
    thanks,

  5. Wow, right from the horses mouth as it were. I’m definately feeling you’ve got a feeling that something is going to destabilize the web 2.0 bubble soon. I guess my main comment is: Do you believe there is a bubble there this time? If so is it anywhere near the same as the last dotcom bubble? Is it possible that there are quite a few more legitimate ideas/companies emerging out of this one as a result of the cautiousness from investors who got burned the last time?

    As for Fox news corp and Rupert Murdoc… Doesn’t tossing money around like this remind you of the discussion we had about it being considerably easier to make more money and faster when you already have a substantial amount of money? Sure its a logical conclusion, but perhaps Rupert Murdoc was just hedging his bets per se. If you got rich from one company you started/owned and that was your main source of income wouldn’t you want to diversify your wealth through further investments in other business’ and ideas? I certainly would.

    Job sites are definately on the list of growing markets. The mainstream sites like monster.com and careerbuilder.com really don’t have the diversity that they claim. I can’t tell you how many listings for the exact same job are copied to both sites and for that matter how many are seemingly worthless mass listings by consultancy firms like volt or robert half digging for more potential employees to add to their database. The market hasn’t solidified in this area like many others where only two or three companies dominate and essentially control the market. Some of the most unique markets like online auctions really only have one company thats relevant like eBay. Once you have someone hooked on eBay and the they build feedback as a seller (and sellers are really what eBay cares about) you don’t really want to switch or take a chance on another auction site unless you’re forced to.

    PS: Dave, you should consider utilizing capital letters as all lowercase sentence structure is so passe’ and late 90’s dotcom boom… πŸ˜‰

  6. Oh yeah, and Rupert Murdoc should definately feel more than welcome to give me money for no apparently reason as well. I’m sure I’ve got at least 3 good ideas that would turn a profit if I had a million or so to throw at them.

  7. Thatedeguy says:

    Brady,

    I believe that given the recent deal, thats about the 2nd richest horse’s mouth to grace my comments, next to dave sifry that is. I’m glad to see it really, as it means that some of us little people get noticed once in a while.

    As for your question, I am definetely seeing some trends that would indicate that there is a bubble forming and it may indeed be ready to pop again. It is in no way similar to the previous bubble at the beginning of the century however. The dynamics of the Web 2.0 sites that we are seeing are making it much easier to create a valuable service site. For instance, we are seeing quite a few new sites that “mimic” other sites. How many digg clones have you seen? And isn’t Digg really just an improved(depending on your POV) version of slashdot? I believe the investors were more cautious at the beginning, but the increased investing and funding recenly are what gives me reason to pause here. As with any group of business, people, etc… the cream of the crop rises to the top and even if we do see another bubble pop, several of those sites will survive. Blogging for instance will survive, as will sites like digg, delicious, and maybe even simplyhired.

    Obviously, I agree that diversification is an excellent reason for some of these purchases as the more diverse your portfolio, the less risk is actually felt. Of course, ask some of the original dotcom bust investors how their diversification efforts worked. πŸ˜‰

  8. But wouldn’t you agree that much of the last bubble turned out to be a joke? I mean most of the companies that were worth their salt just got hurt by the “so called” bubble popping and the resulting backlash which probably killed more good business’ then fake ones which would have died off of their own accord or lack of funding when they didn’t turn profits.

    This time around I’m just not seeing the crazy business ideas I did before. Like I remember about 20,000 attempts at social networking sites and business planning and online calendar applications, not to mention loads of free web email services popping up with their own gimmicks. What I’m seeing this time is people investing in ideas and business’ that are already established and have a community but just haven’t yet been monetized to any degree. Look at flickr for instance, its a great service with a wide following and ease of use but it has pretty much no ads and has yet to make a countable dime on selling hard prints of pictures people submit. Yahoo bought them to add to their portfolio of user services in what I think was an intellgent move. It adds to their overall value and encourages people to use their other web properties (or it will once you link them all together). I disagree with Dvorak when he says flickr is a losing proposition. Perhaps on its own it might be but as a service part of Yahoo its real value is not so much in the incoming stream directly from it but the residual users and base that it brings with it. Yahoo is buying users essentially.

    I guess what I’m trying to say is that the main difference I see this time vs the dotcom bubble is that investors are throwing money at real established ideas that have been proven to work. This might be a bubble but it certainly has a lot less fluff than the last one if it is. God only knows during the last one we could have thrown these comments in a business plan and said we wanted to start a site that involved us commenting back and forth and we would have gotten at least 2mill for writing a business plan that had punctuation and correct grammar.

  9. Thatedeguy says:

    It may be true that last time, it was more the backlash and some of the companies that had investors were silly. But take a few minutes and go over to techcrunch.com and see how many calendar, photo, social bookmarking and such sites there are now.

    I also don’t disagree that the investing is in more sound business ideas this time around, however I still feel that the amount of money is too much. While I’m sure that a company like SimplyHired uses quite a bit of bandwidth and server time, somehow, I just don’t see where a 13.5 million investment is warranted. Maybe as a purchase price, but all they did was invest and get a percentage of the company.

    Mostly, I just think that the valuations are getting more and more bloated.

  10. Well, in that case quit calling for the end of the tech bubble and help me startup a social bookmarking site quick! πŸ™‚ No really…. I’m not only somewhat kidding.

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