Spiceworks Just Got Acquired by Publisher Ziff-Davis
-
@JaredBusch oh. . .
-
Well, for those of you who know, ML was attempting to purchase SW several months ago and for very logical reasons they weren't willing to try to sell to us (we know how the sausage is made so there can't be any bluffing like you could to Ziff Davis), but they refused at the time to deny any financial failure or plans to sell details: so we've known for months that they were looking for a buyer and hoping to find one before time ran out. They were smart not to try to sell to us, we were confident that the financial discovery phase would have resulted in a valuation far lower than we assume that they got with ZD. ZD is a logical buyer for them, all things considered. Good for them to sell to, ZD will likely regret the purchase heavily once they attempt to incorporate.
-
@scottalanmiller not knowing to much about the whole situation, can you elaborate on the the whole financial side? I mean I was have been apart of the community for 6 years so i have seen things on the decline, but i didn't think things were that bad.
-
It's a bit of a bummer. I'm pretty fond of the site and community. While I no longer use the product, the community has always been a fun spot and mostly helpful. A lot of the people here on ML are the reason I ever joined SW in the first place. Hopefully after today's shakeup they are able to leverage some of this new backing to get things back on track and growing again. Trying to stay optimistic.
-
@david-wiese said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
@scottalanmiller not knowing to much about the whole situation, can you elaborate on the the whole financial side? I mean I was have been apart of the community for 6 years so i have seen things on the decline, but i didn't think things were that bad.
Well they were never profitable and always lived on venture capital funding. That was never a secret. Their model was built on huge growth year over year and once they started shrinking, there was no way it was going to work.
The rumours that we had heard, but SW asked us not to repeat (but didn't deny) was that they only had 6 months of funds left and had to be bought before that money ran out or they'd be over and done with no possibility of a future. Obviously that rumour, which was the foundation of the attempting to be purchased rumour, is almost certainly true as it would be the only reason for the hasty sale. No concern over that getting out now as the purchase is done. So ZD either knew and was okay with the financial situation, or is just finding out now. Either way, not SW's problem any more.
The "rumour" was from SW staff internally. Several employees had let slip that there were no funds left and the only hope was to make it till Spiceworld was over and maybe find a buyer during that time. So this is very much the eleventh hour if that insider info was true, but everything sounds like exactly would be expected if it was true.
ZD has a strong play here in liquidating SW assets and stuff, rolling it into their "online magazine" portfolio and operating it at a fraction of the current costs.
-
@dimforest said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Hopefully after today's shakeup they are able to leverage some of this new backing to get things back on track and growing again. Trying to stay optimistic.
ZD doesn't operate communities, but content platforms. My guess is that they will be looking to make it more of a magazine than a community. But just a guess, but that's where ZD's value would appear to be.
-
Man, I have so many posts there... but anyway...
-
@dbeato said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Man, I have so many posts there... but anyway...
I completely doubt that there is any chance now that the community will "go away". That would seem crazy. Rather my expectation is a change of focus away from products (look at the layoffs, product support was hit, so likely those are done as they don't make any money themselves) and away from community and towards original content which is what ZD already has teams for so they can simply use SW as another place to put that content.
-
@scottalanmiller said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
@dbeato said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Man, I have so many posts there... but anyway...
I completely doubt that there is any chance now that the community will "go away". That would seem crazy. Rather my expectation is a change of focus away from products (look at the layoffs, product support was hit, so likely those are done as they don't make any money themselves) and away from community and towards original content which is what ZD already has teams for so they can simply use SW as another place to put that content.
Makes sense, more focused marketing then.
-
Wouldn't any attempt to turn the community into a more passive audience only for pre-written content simply kill off the community? Speaking only for myself the only reason I'm on there now is because I kept finding myself there when searching for answers to questions. There's a million options for articles, forums that actually produce solutions however..... those are few and far between.
-
@dbeato said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Makes sense, more focused marketing then.
and lower overhead. I'd be looking for any way that they can cut costs, like leaving Austin completely.
-
This line is not very encouraging for the ongoing health of the community: "As a combined company, our focus is clear, and our goals are achievable: to build the preeminent marketplace that connects technology buyers and sellers"
-
@Kelly said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
This line is not very encouraging for the ongoing health of the community: "As a combined company, our focus is clear, and our goals are achievable: to build the preeminent marketplace that connects technology buyers and sellers"
Depends on how you look at it. The assumption was that they were going to close up shop and shut down the community by October or November. Now it seems that the community is staying. So it's extremely encouraging compared to the reasonable alternatives.
-
That may have always been their desired business model, but the community spiraled into such a richer resource than that. It would be a discredit to the community to limit description that way.
-
Once taken over, they could possibly start charging a small fee for membership to include the help desk and monitoring products. A buy out company normally looks at ways of increasing profits.
-
@StuartJordan said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Once taken over, they could possibly start charging a small fee for membership to include the help desk and monitoring products. A buy out normally look at ways of increasing profits.
That would likely reduce profits. Especially given the support team layoffs. A product that makes its money via ad revenue can't realistically start charging, especially when functionality has been declining, not increasing. In order to do so they would need to maintain or increase the very things that they have been phasing out, and would just be expected to cause their existing users to leave.
ZD isn't reckless, they are buying to operate the business, not to burn it down for a few months of increased profits. Profits don't go up just be increasing prices. That could easily be the nail in the coffin.
-
@StuartJordan said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
A buy out company normally looks at ways of increasing profits.
This is true, especially when buying a company running at a loss. But the primary way that buyouts do this across the board is not by doing things that the original company could have done. If charging for the software could have made money, we'd likely have seen it happen long ago. Instead what we expect is ZD to bring in their expertise and/or scale and leverage that to lower the overhead of SW to, they hope, a point where the existing model starts being profitable by not costing as much.
Same model that ML was interested in using with them. We know how to operate a website at massive scale with a tiny fraction of their costs. What has been costing millions in infrastructure and staff at SW we could roll into our existing ops almost without noticing it! Yes, they have a ton of traffic, but not an amount that is significantly more than our existing infrastructure and support team handle today. We'd need no new people, and only a nominal increase in physical infrastructure. But we could shave millions from their cost.
-
Is there a way I can close my account over there so I don't get spammed
-
@WLS-ITGuy said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Is there a way I can close my account over there so I don't get spammed
You can just request it, should any community people still be working. Community people are in the layoff list so far.
-
@scottalanmiller said in Spiceworks Just Got Acquired by Publisher Ziff-Davis:
Community people are in the layoff list so far.
As opposed to who? They've already terminated all of their previously valuable community members, going on a year now right?
