Market downturns do help to bring rivals together

It's not quite as incredible a merger as, say, Manchester United

and Arsenal forgetting their differences and becoming one club, but 365

and Rivals.net's link-up will cause a few jaws to drop.



It's certainly a sign of the times. A glance at the ad sales houses

shows that consolidation is the theme of the day. It makes sense that

Chrysalis, which owns Rivals.net, and 365, are pooling internet

operations in a new company to cut costs.



Market downturns may often increase competition but they also can lower

barriers between rivals. It's one of the things that fuelled The

Carphone Warehouse's Charles Dunstone's comments last week when he was

quoted saying that downturns were the time when business gets

"interesting".



Competitors can now look for the similarities rather than differences

between them, particularly if they are looking to grow a new market.



Instinctively it sounds good, though perhaps not as much as Sports.com's

apparent cherry picking of rival Sportal's overseas operations.

Sports.com has just bought sportal.de.



The Chrysalis/365 deal is not as comprehensive as it might have once

been, but this is a clue to how it could work. Effectively, 365

Corporation and Chrysalis are merging their intenet activities; however,

neither group has as many pure internet plays as they once did. The 365

Corporation has concentrated recent launches on telecoms and gets income

from premium-rate phone businesses. Its management can now concentrate

on that, while Rivals.net gains by losing a competitor.



Both businesses should get a clearer route forward but new structures

and operations can be a distraction. There's been talk of Chrysalis's TV

connections and the opportunities they could provide for 365.



Fine. But exploring such deals takes time and resources. If the

joint-venture cannot develop the site's existing models and its reliance

on advertising then it needs to think on. Maintaining such illusions

would be the new-media equivalent of an own goal.



Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer
Mumsnet admits users' emails and passwords accessed via Heartbleed bug