Xing introduces additional critical revenue source in an innovative way - revenue up by 50%?
As I blogged before, we put our job ad for a php developer on the Xing Marketplace.
Now I just received an email from Xing telling me that they are going to start charging for use of the Xing marketplace, but contrary to already established job sites like stepstone, they charge on a per click basis rather than on a per ad basis. This will make a lot of sense to headhunters and HR people who can have a much better ROI overview, similar to google Adsense.
One click costs 0.49 € and might drive strong additional revenue to xing. The job ad I mentioned before has had 20 clicks in 48 hours = 10 clicks a day.
This would bring an additional 150 € to Xing for a job ad that runs for a month (usual length). Other job ads have much higher click rates, as suggests the marketplace startpage: 2383 clicks for the most popular one ( = 1 167.67 € for Xing ).
In the last 48 hours there were at least 350 new job ads. Assuming that people continue to use Xing marketplace even though they have to pay as of today, and assuming those job ads have the same clickthrough rates I have, this would mean 175 * 10 * 30 = 52k clicks a day or 26k € of revenues a day. Yearly this amounts to almost 10 Mio €. Not bad for Xing, which would mean they could augment their revenues by 50+ % with one move. They made 8.2 Mio € in the first semester of 2007.
What I like about Xing is that they are not trying to monetize their platform with ads. They are providing helpful service that generates return on investment for it’s users. They are making up to 20 Mio € Revenue (expected for this year) with only 4 Mio members, meaning that each member spends 5 € p.a. on average. Corresponds approximately to the 13 % premium member rate.
Imagine they had the facebook number of users, 40+ Mio, they would do 200 Mio € in revenue, more than 280 Mio $! Compared to the rumored 150 Mio $ of facebook, they are extracting double the amount of money from their users! Xing is doing great on the monetization, really.
Their P/E is around 60 (190 market cap / 3 mio profit), making it a bit more expensive than Google (53.29), but still much less expensive than Baidu for example (P/E = 180). With their new revenue source, this company might just make quite a lot more revenue, so maybe their are not that expensive, after all.
[Disclosure: I own Xing shares]
Tags: ads, efficiency, facebook, monetization, revenues, users, xing