When I left Internet.com in 1996 and went to Earthweb, I was in charge of building Earthweb’s properties into something competitive with Internet.com. At the time, there were already a few players in the news market and I decided that Earthweb’s best positioning was to stay focused on the developer community instead of trying to do just Internet related stuff. Many people (including a lot of people on this list) have asked me what I thought of this announcement. So here it is.
Two roads converge
In a way, today’s announcement was one that didn’t surprise me much. Over the years, I’ve stayed in touch with people at both companies and, as time went on, I came to realize that both properties should be integrated. Before Earthweb’s IPO, such discussions were held both at Earthweb and at Internet.com and there seems to seem some differing views on the subject. However, I had always been nagged by the feeling that the two properties (the developer.com network and the internet.com network) would be a perfect fit.
With today’s announcement, I think that both companies benefit. For starters, Internet.com has clearly established itself as a leader in offering content to the internet community. With this acquisition, Internet.com solidifies its reach to the developer community. That’s a great thing for Internet.com and I think that those properties will fit very well within the network and that Internet.com will leverage its existing properties to maximize return on the assets they have acquired. As a result, I’d like to congratulate Alan Meckler and a very smart move.
On the Earthweb side, I am happy to hear that the company is focusing on a particular area in which it has established a strong leadership. The acquisition of Dice.com allowed Earthweb to get into the job placement market and establish one of the preeminent IT-related job boards on the market. This could position the company for a possible acquisition by a monster.com or hotjobs.com in that it is now more aligned with their business. If run successfully, the new Earthweb could be a very nice acquisition play.
Notable though, was that ITKnowledge, the fee-based service that Earthweb developed was not part of this acquisition. Jack Hidary has said that the company will be getting out of that business and I believe that he’s seeking a buyer for this service. The bottom line, though, is that Earthweb will manage to lower its costs as it will get rid of some of the overhead required to build new content. While it has built some strong properties, the company was too much of a niche player to successfully run the content unit to profitability. As a result, it’s a smart move on their part to get out of that business.
The most fascinating thing is that Earthweb is no longer the company that went public in that, apart from some of founders, nothing is left in terms of the model and assets the company went on.
All and all, this is a great win for Internet.com, as it secures its preeminent position in the content arena and allows it to expand into new markets. I am not, however, familiar enough with the job board business model to comment on Earthweb’s future potential but I am glad to see that the company’s management has made some very tough decisions and is working on focusing in a particular arena.