Trinity Mirror bought another three classified sites today. The price — £900,000 for a business that should generate £4m revenue next year — was nice.
With the property market going downhill fast, this was probably an opportunistic purchase, and none the worse for that.
But a quick perusal of the Trinity’s corporate site reveals that the company now owns 13 stand-alone recruitment sites and six stand-alone property sites. Most are acquisitions, some of which are presumably still be run by the founders on earn-out deals.
In addition, Trinity runs hundreds of localized sites that hawk cars, houses, jobs and variegated bric-a-brac.
How much is Trinity spending on integrating all of the various technology platforms involved?
How many founder-entrepreneurs are sticking around? Is Trinity trying to make them collaborate with one another?
If so, is there a portfolio approach? Do all of these sites sit comfortably next to one another? Or is the company just following the general principle of grabbing as much market share as possible?
And in a market like recruitment, does owning 13 separate sites make sense when the competition includes mega-sites like Monster?
No-one seems to be asking questions like these — at least not yet. That’s because Trinity’s digital sites will probably generate only around £40m in revenues this year. In the scheme of things, this is small beer.
Meanwhile, in terms of the numbers, things look just fine. During the first six months of this year, the sites acquired by Trinity during the past two years increased their revenues by 24% YOY. They generated fat operating margins of around 30%.
Of course, the company suggests that it “remains focused” on building a market-leading portfolio of online brands”.That implies a lot more deals. The risk has to be that Trinity ends up with a massive portfolio of classified web sites that proves too big to manage effectively. . .