Flavio about Business 2.0

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]

Update: Viadeo has now removed the unfriendly comment from their website on the link posted in the comment below. Here’s the google cached version of the comment:

http://209.85.129.104/search?q=cache:JRpZwg9RqXIJ:
www.viadeo.fr/annonces/annoncestoutes/%3FsubCategory
%3D65700+viadeo+spam&hl=en&ct=clnk&cd=4&client=firefox-a

Viadeo spam
I have no desire to become a member of Viadeo. I currently receive on the order of several dozen requests daily: **SOMEONE_I_DON’T_KNOW** invites you to join the Viadeo network Hello, I have the pleasure to invite you to join me on Viadeo, the business and social networking website that works. Over the past 2 years, over 1,250,000 people have already joined Viadeo and the network is expanding at over 3,000 new members every day! - etc.- Despite several emails addressed to abuse@viadeo.com …
None - California
Published by No Spam
Published on 02 August 2007 - 2 people interested

I also found this link: http://twitter.com/tv/statuses/298470912, confirming the issue.

I just received the following email:

Sophie Plantieux invites you to join the Viadeo network
Hi,

I’d like to invite you to be part of my Viadeo network.

I use Viadeo to manage my professional contacts and get in touch with other people in my industry. Give it a look : it has paid off for me.

Kind regards,
Sophie Plantieux
Registration only takes a few minutes !
I want to join

Please join now by clicking on the above link.

PS: By inviting your contacts to join your network on Viadeo you increase your networking opportunities exponentially. Some Internet Service Providers deactivate html links. If this is your case, to accept this invitation simply copy and paste this address in your Internet browser:

http://www.viadeo.com/action/index.jsp?actionId
=002p15toal6zhez&urlId=0021v1e4bjtkdcp0

That looks like an ugly spam message to me. Because neither do I know a Sophie Plantieux nor does that person seem to exist, according to google at least. She has a Viadeo account with 19 contacts and a Xing account but with no contacts. This is a tactic that could likely backfire, just wait until a couple of bloggers receive those emails and you will have a mess. On the other hand, bad press is also press, so they might just be waiting for that. Or is it a jealous competitor who is sending emails in their names? The email came from a gmail address, so it can not be proven that it is from viadeo themselves.

Now they boast 1.6 Mio members, almost half of the 4 Mio users that Xing has. Could they be a serious competitor to Xing? I haven’t seen that many French on Xing, they’re mostly on Linkedin and heck - maybe even on viadeo!

Looks like Xing got a good foothold into the spanish market with their acquisitions. But what about the rest of Europe?

As you may have noticed on your Xing account, they introduced a new feature that helps better describe your past. You can now add what you were responsible for at a specific job and what kind of company it is. This is something that Linkedin has been offering since years and is no technological challenge to implement.

Xing has done a nice job adding some ajax layers to facilitate editing. The usability of Xing is great, and they’re doing everything to make it even better.

On the other hand, linkedin has finally introduced profile pictures, a feature Xing has been offering since their start.

Those small tweaks are necessary and help the main professional social networks keep up with others like facebook. While they might not like each other that much, they should maybe be more worried about facebook when they introduce their friend grouping feature.