Shares in online classifieds business SEEK rose 4c to a new high of $2.41 this morning as the business maintains its momentum as the new big internet success story on the ASX.
As Ziggy Switkowski yesterday declared that the internet boom is back, he must surely regret not focusing on SEEK during the dotcom era when Telstra was splashing ridiculous sums on stakes in Sausage Software and Solution 6.
While the $680 million company only raised a net $11 million in new capital for the business out of the $162 million raising, it will no doubt be keen to maintain the momentum from all the publicity from the float. To that end, the anonymous Crikey tips box yesterday received a missive claiming SEEK will soon announce the purchase of rival online jobs site, bluecollar.com.au.
An estimated 14% of the classified advertising market has migrated online, and SEEK claims to have a 63% share of this – equivalent to 8% of the overall market. But barriers to entry are low, and SEEK will need to keep spending a truckload on advertising to stop new entrants cutting their lunch after seeing the fortunes made in cash and paper for the SEEK founders.
While the magazine market is full of niche classifed players, the online jobs market is yet to go that way, although the likes of Artshub.com.au is a good example of what can be done.