The Tinus Trust

Schibsted no. 3 worldwide in online classifieds

While many publishers moan about the loss of print ads, Schibsted has managed to build up its online classified ad business. Now it's an industry leader worldwide, only behind eBay and Craigslist. - Schibsted is probably the smartest media company in the world right now, an internationally renowned media consultancy claims in an article in Bloomberg Businessweek.
[20.10.2010]

 

Schibsted successful business strategy and push for growth in emerging markets does not go unnoticed in the media industry. After purchasing Leboncoin.fr, Schibsted has stepped up among the biggest online classifieds companies in the world, Bloomberg Businessweek writes in an article called “Norway’s Schibsted: No. 3 in Online Classifieds”. According to Bloomberg, Schibsted is now ranked as number three after the giants eBay and Craigslist.

- 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. According to Zollman, Schibsted has been willing to free itself from print, where appropriate, and is willing to invest, where most media companies now are more watchful.

Craigslist doesn't disclose financials, but AIM Group estimates its annual revenues at USD 120 million, equaling almost NOK 730 million. If accurate, that's less than one-fourth the revenues of Schibsted's online sites worldwide (including its non-classified online businesses). This comparison is not totally accurate, since Schibsted’s numbers also include ad revenues from other online sources. In any case, with an average 24 percent operating margin Schibsted’s online ad sites generated 20 percent of the Group’s profits of almost NOK 13 billion last year.

Hard to follow Schibsted's example

According to Bloomberg, it may be too late for other publishers to follow Schibsted's example. Going up against established competitors is tough—as Schibsted discovered in 2003, when it set up a classified ad site in Sweden but couldn't make headway against the local classified ad site called Blocket.se. Within months, Schibsted closed its site and bought Blocket.

- The acquisition price was considered to be high, but very soon the annual profits surpassed that, comments Schibsted’s CEO Rolv Erik Ryssdal, who at the time was running Schibsted’s Swedish operations.

Smart decisions

To a large extent the Norwegian media consultant Lasse Gimnes at GimCom agrees with his American colleague; however, he’s not quite sure how smart Schibsted really is.

- Obviously, Schibsted has done a lot of things right within online classifieds, not only in Scandinavia but also in the rest of Europe, Gimnes says to E24.no, Schibsted’s Norwegian business news site.

- However, I’m not sure whether it’s among the smartest media companies in the world. There are a lot of industry players who are fare bigger than Schibsted. For instance, Swedish Bonnier is twice as big, Gimnes continues.

But still, Gimnes seems to agree that the online classifieds business has done Shibsted a lot of good.

- The company has taken a lot of smart decisions in the past years. That, combined with good cost control, has given Schibsted success.

Read Bloomberg Businessweek’s article here