In January, it was announced (here via Reuters) that Xing had aquired Cember.net for 4.4 million euros ($6.4 million), to be paid in stages. Xing is a professional business social networking site that had 4.25 million members at end-September 2007 and competes with US-based Linkedin. Cember.net apparently is the largest professional networking social network in Turkey with over 280,000 members. The site is ranked at 117 in Turkey according to Alexa. Overall ranking worldwide looks like this when compared with Linkedin:
Cem Sertoğlu came up wıth a good metric for the value of Turkish eyeballs on this deal:
The €15/member price tag for the acquisiton shows that there's still a bit of a discount for Turkish internet properties. Xing is trading at about €45/ member.
Based on this metric, and with an estimated (although dated) 16,000,000 Internet users in Turkey as of September 2006 (only representing 20% of the population), is this a good price? It's hard to say. I can't imagine a lower price for any Internet property given good traction, but to Xing, this might seem damn expensive, given that Cember's members represent barely 2% of all Turkish Internet users. Facebook has 1.6 million users with a page in Turkey, representing 10% of all Turkish Internet users. Please remember that 25% of Turkey's population resides in the 15-29 age range. Xing may figure this and that it is only a matter of time before membership picks up.
Perhaps it's the demographics, or the now-coined "Social Graph", of the Turkish users that warrant the value of the user, those users being professional networkers. Overall, it seems that Xing is rushing to spend its IPO Euros in efforts to consolidate Europe, before Linkedin smashes them to bits. Linkedin already has a huge footprint of Turkish users worldwide, although the site is in English. However, in this case for Turkey, it appears that, although not entirely having the same utility as Linkedin and Xing, Facebook has really already won the game, now the #2 most popular site in Turkey behind Google and in front of YouTube (despite the recent blocks). On a side note, this brings up the question: When will Facebook be blocked? Again, perhaps its only a matter of time before someone builds the wrong application.
In my next post, I'd like to touch on another issue that arrises from this discussion, that of Turkish Internet "Copy-Cats" or "Clone" sites of Western sites. Is that the answer to a successful Turkish Internet property? Stay tuned...
 Technorati Tags: Cember.net, Linkedin, Facebook, Xing, Deal Flow, Turkey, Acquisitions, Social NetworksLabels: acquisitions, Cember.net, Facebook, Linkedin, Social Networks, Xing
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Publisher: Jon H. Black
