Why Build When You Can Buy?

by Seana Mulcahy, Sep 18, 2006, 1:00 PM

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Someone asked me the other day what it was like in our space now, if things were healthy or if we were struggling as we did back after the Dot-Bust. It's funny, because I haven't had a friend ask that question for a while. Maybe they all think that, but just don't want to say.

I don't know what you think, but from where I'm looking, business is great. Pretty much on a daily basis, I get e-mails from recruiters and colleagues looking for everyone from search planners to media directors to other executives. Of course I am seeing more positions offered in New York; that's been the mainstay.

Back in May, my weekly article was centered on me now being a free agent. I'm running my consultancy again. I was so overwhelmed by the postings of well wishes I received. I even received potential offers. This just reinforced the idea that there was growth in the industry.

The other day I was brainstorming with a client. She and I were seeking sites to create a rather unique strategic alliance within multiple verticals. As we were defining potential sites/networks for me to peruse, something funny happened. In many instances I mentioned calling someone that she said was no longer at the company--and vice versa. She also mentioned companies that she dealt with a couple of years ago. Many of them had merged. Anyhow, the point is, the industry is not only thriving--it continues to be a sliding landscape.

I was reading Biz Report online. An article dubbed Old Domains = New Business?" caught my attention. It speaks of big online names like InterActiveCorp and AOL snatching up smaller companies. Most are in niche markets. For instance, InterActiveCorp recently announced taking a stake in CollegeHumor.com.

In August Warner's AOL snatched up GameDaily, a niche site that claims to reach around 4.5 million hardcore gamers a month and whose 13 employees put out a newsletter that reaches an estimated 15,000 industry professionals.

In July CNET bought UrbanBaby, a small community site aimed at new moms. The company only had 15 employees. This seemed a bit unusual to me, as CNET = tech. It just goes to show that big sites want niche audiences.

In a recent Business Week piece, Allen Weiner, research director at Gartner, a firm that tracks technology companies said, "There are two levels of purchase going on right now." He continued, "Established Web companies are entering new categories to expand content spread and functionality, and traditional companies are vying for platforms for viral distribution. Both are going after acquisitions; they're just looking at different things."

The list of larger sites snatching up smaller ones goes on. How do you feel about these acquisitions? What does this say about our industry? Post to the Spin blog and let us know if you think buy versus build is the way to lead the online space today.

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