Remember, they have no revenue stream if publishers stop sending them content. Dollars to donuts most aggregators will not be in business two years from today. Indeed and Sh are desperate!!!

Such is what a business valuation is comprised of. It’s why residual revenue is the panacea of the business world; it’s why contingency firms don’t have a business valuation – by definition, you can’t when all you work is 1-off deals.

Biz Valuations are all about current assets (plant/property/equipment) + NPV (net present value) of all anticipated future earnings + a small spiff for intangible assets (i.e. brand recognition) . . . X (multiplied by) the industry multiple-du-jour.

If you have zero revenue, you have no business valuation. Sure, you can be bought “on spec” (speculation) . . . meaning someone might say that if they synergize your capabilities with theirs, potential revenue will be XYZ. However, as we know, those utopian dreams are usually not recognized . . . and it’s no secret that most acquisitions destroy more value than they create over the long-term.

Then you say there’s nothing proprietary about search engine technology. It makes one wonder why Microsoft would be interested in buying Yahoo when they, themselves, have msn.com. Why does Google still have majority market share?

Lastly, you bring up social networking and “matching technology” as have taken the air out of vertical search. Yet, your opening paragraph itself says that Google was disappointed by MySpace. And let’s not even start talking about Facebook (are they minting money yet?).

So which one is it?

This reminds me of the late 90s, early 2000s when Google was yet another search engine amidst 5+ major competitors. I think vertical search engines are at their infancy (kayak and other verticals included) and it will be a matter of time before we see winners and losers.

As far as I know, companies seem to catch the PPC concept pretty easily (which is why they advertise on Google and why their advertising budgets are bigger on some search engines than others).

2. As for your “Nothing proprietary” remark, that applies to ALL websites. Lets face it we are seeing generalist job boards, niche Job boards, vertical search, jobs/ social networks springing up like mushrooms on an amost daily basis – Technology is cheap. Gaining traction in the market with the said website is an entirely different matter!

3. Current Investors – Dont make me laugh, some big players out their want a big slice of the online recruitment market and fact is you dont get that overnight. If someone wants a slice of it and wants it now, the likes of Indeed will be looking very attractive! As for price, its all relevent to whos buying / selling!

4. History – You cant compare the fire sale of a business to the sale of a developing business in a take out situation. Thats a bit like saying RBI wont offload the totaljobs and other jobsites as part of the $2.5b sale because job site newninetofive.com (who) ended up going bust because it couldnt meet ongoing marketing costs! You are NOT comparing apples with apples. It was a flippant and stupid point you made!

5. Out of time – the market is just getting warmed up, these sites are evolving and improving their models to increase revenues. Its still very early days for them!

As for your point about the type of clients the site has, does it matter what the advertising mix is? If a site is selling adspace, its selling adspace, if that advertiser is a job board one week or an employer the next it matters not – what is important is that the site is of enough quality and has enough traction in the market to attract advertising spend. That business is of greater market value / becomes more attractive if it can show ongoing advertising revenues and revenues increasing as it moves forward.

IMO Indeed is a very attractive business thats still in its early days, carving out further market share and increasing its revenues in what is currently a difficult advertising sales environment.

Traffic matters.

Sit back and watch what happens. We’ve only been at this a few years now. We haven’t sold, because we don’t want or need to. We’re trying to build something.

And here are a few rebuttals to your opinions.

1) Because you get more when you pay. Pretty easy concept to understand. Our growing number of advertisers certainly do.
2) You obviously aren’t aware of our non-PPC products, which currently exist. Maybe more research, or a call to us before writing the opinion, would help.
3) Nonsensical
4) Edgeio has no relevance to us.
5) SH is exclusively partnered w/ MySpace and LinkedIn…those are social networks. Also, video and matching technology haven’t proven anything yet, as opposed to SH and Indeed, which are producing results already.

While job posting on Smuz will always be free, we believe this new tool will deliver Big Board results for a fraction of the cost. By managing the details of cost-per-click bids and daily budgets over multiple sites, we think this service will make PPC a much simpler option for most employers.

Details are at…

http://smuz.com/ppc.html

Sincerely,

Paul Pickthorne
Smuz, Inc
paul@smuz.com