Interview: Norway's Schibsted to hire more staff to stave off Facebook in classified ads
06/12/2016 17:29
* Schibsted to add 200 tech jobs to bolster classifieds
business
* Facebook announced in October it is entering the market
* Schibsted CEO says Facebook has helped enlarge the market
* Firm bets on current markets, mobile and professional
services
By Stine Jacobsen and Mia Shanley
OSLO, Dec 6 (Reuters) - Norwegian media group Schibsted
SBSTA.OL plans to add 200 people to its 1,800-strong
technology team in the next year to further develop its online
classified ads business and fend off competition from Facebook
FB.O , its chief executive says.
Schibsted holds market-leading positions in local classified
advertising websites across Europe including Finn in Norway and
Leboncoin in France, and has a big presence in Asia and Latin
America.
Everything from old ski clothes to cars are bought and sold
on Schibsted's sites while the company is recruiting heavily to
deepen its offering in categories like real estate and jobs.
Schibsted faces a test of whether it can fend off the likes
of Facebook and Google GOOGL.O , exploiting its local character
in a $21 billion industry which McKinsey & Co sees growing at 10
percent annually.
Facebook, which is searching for new ways to engage users,
launched its "Marketplace" in October where people can buy and
sell items locally, in what was seen as a step into the
classified advertising market. urn:newsml:reuters.com:*:nL3N1C93SF
Facebook must be taken "very seriously", Schibsted Chief
Executive Rolv Erik Ryssdal told Reuters in an interview.
"So far, we think they are enlarging the total market, but
we are watching very closely what they are doing," he said.
The classified ads business accounted for 38 percent of
Schibsted's revenues last year and 81 percent of its earnings
before interest, tax, depreciation and amortisation, which
amounted to 2 billion crowns ($239 million).
The launch of Facebook's Marketplace has weighed heavily on
Schibsted shares, which have fallen 22 percent since October to
trade around 177.6 crowns on Tuesday, a near 40 percent drop
this year.
"If Facebook is serious about this and willing to say 'this
is a game for me which I'm willing to play for the next five
years' I think they are in a very strong position to win this
game," said Thomas Schumacher, an online marketplace specialist
at Digital McKinsey.
TECH TALENT
With 6,800 employees in 30 countries, Schibsted dominates
the classified ads market in much of Europe. South Africa's
Naspers NPNJn.J runs Russia's biggest classified ads site,
while in the United States a range of players including letgo,
eBay EBAY.O and start-up OfferUp compete in the market.
Schibsted has been cutting costs in its newspaper division
while spending more on its technology operations and recruiting
in its five European technology hubs of London, Barcelona,
Stockholm, Oslo and Krakow.
In the past two years Schibsted has recruited a team of 100
in London. Facebook announced last month it would hire 500 new
staff in Britain next year, adding to the 1,000 people it
already employs there. urn:newsml:reuters.com:*:nL8N1DM275
Schibsted is investing in its mobile "boot sale" app Shpock
which is available in six countries. It is also working to boost
its professional content, aimed at commercial sellers, in real
estate, jobs and cars - areas which it believes can generate
greater revenues.
Developers are working on products like messaging, automatic
picture recognition and pricing tools for professionals.
One Nordic fund manager with a position in Schibsted felt
the Facebook threat had been overplayed as it looked like the
social media giant was not planning much in the "professional"
market.
Ryssdal said it would require something very special to
disrupt the markets that Schibsted dominates today.
"Traditionally what Facebook and Google are good at is
making big and scalable solutions while what we are good at is
focusing on exactly what are we doing and then adapting to local
markets both product-wise but also with boots on the ground," he
said.
($1 = 8.3639 Norwegian crowns)
(Editing by Adrian Croft)
((mia.shanley@thomsonreuters.com; +4687001004; Reuters
Messaging: mia.shanley.thomsonreuters.com@reuters.net))
Keywords: SCHIBSTED FACEBOOK/