Carol Matlack | Bloomberg Businessweek
Like newspapers almost everywhere, Norwegian dailies VG and Aftenposten have watched their once-lucrative classified advertising sections shrivel as readers defect to websites where they can browse and post ads for free. That doesn't bother the papers' publisher, Oslo-based media group Schibsted. It also owns the website that lured away most of the classified ad business-and that site is more profitable than print ads ever were. "We weren't afraid to cannibalize ourselves," says Chief Executive Officer Rolv Erik Ryssdal about the group's decision in 1999 to spin off an online business called FINN.no that competes directly with its papers.
Schibsted, founded in 1839, has taken that successful strategy on the road. Its online classified business has expanded worldwide, with sites in 22 countries listing everything from real estate in Malaysia to cars in Italy to job openings in Argentina. On Sept. 22 the group bought control of France's No. 1 classified site, leboncoin.fr, from a former venture partner, in a deal that values the site at $540 million. Schibsted is now the global No. 3 in online classifieds, behind eBay (EBAY) and Craigslist. Revenues from its classified ad sites hit $245 million during the first six months of this year, with profit margins at some of its best performing sites as high as 60 percent.
"Schibsted is probably the smartest media company in the world right now," says Peter Zollman, founding principal of AIM Group, a Florida-based media consultancy. "They have been willing to jettison print, where appropriate, and they are willing to invest, where most media companies now are hunkered down."
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