God Bless the Repo Man
If the market has a bottom, we've clearly hit it because the repo man is here to clean away the carcasses. But don't be scared; Dana explains why this is a good thing.
There’s a continuing argument I get in emails these days about whether the Internet marketplace has “hit bottom” yet or not.
I don’t know how long we’ll be at bottom, but whatever bottom there is, it seems clear to me we’ve hit it. I say that because the repo man is here.
When a market is falling, there are no buyers, just sellers. But at some point, the bargain hunters find it safe to come out. They take assets for pennies on the dollar, then try to turn them into pieces that might fetch, say, a quarter on the dollar. This gives them a profit.
Recently, a bunch of folks have jumped up to say they’re ready to offer this service, to take out distressed properties for a song. Some have even hummed a few bars of the song and flashed their wallets around, letting us smell the crisp, green-ink smell of relief from our distress.
Barry Diller says he’s willing to put $1 billion into Internet properties this year, if he can get them at his price.
NewsFactor, the parent of E-Commerce Times (for which I once wrote a column) and other properties, is bragging about its profitability and offering to take out money-losing competitors.
Now, included in what could be considered the most organized of such efforts, we have an outfit called The Website Recycling Co. It says it’s interested in buying whole sites or just components.
There’s certainly enough merchandise for this new market. I know, because recently one of the sites I wrote a column for entered Chapter 11 bankruptcy, and since it hadn’t paid me in three months, I found myself on its creditors’ committee.
As an unsecured creditor, my job is to get the maximum value out of the assets this outfit has. The more the committee can get, the more I can get of what I’m owed. (I haven’t yet gotten a complete set of instructions on this, but I’m guessing that’s the nature of the gig.)
The appearance of buyers in the Web-content market is good news for me, but it’s also an important point in the economic cycle and good news for you.
For months now, we’ve been told that most sites are worthless. No one is buying ads; sites that want to charge readers are being laughed at (by me, if by no one else); and workers are, frankly, scared. (I’m not planning to go anywhere this summer — I need to make sure we can pay the school bills this fall.)
Into this climate of fear, uncertainty, and doubt rush the repo men. They exist everywhere, in every market. For centuries they’ve done their business by the sign of three golden balls. (They’re prowling the Cisco parking lots right now, I hear, looking for Lexuses whose owners are late with the payments.)
They’re certainly not loved. (“Mr. Potter isn’t selling, he’s buying, he’s picking up some bargains.”) But like scavengers in nature, they provide a valuable ecological service.
Once we clean away all these carcasses, our market won’t stink so much. The air will become fragrant and clean again. The way will be clear for new growth. So God bless the repo man.
