Recession in Online Businesses and Marketplaces – Are We There Yet?

AdBriteI’ve written about the recession that is (finally) gotten into the online marketplaces before – Online Marketplaces Hit by Recession? – the recent development on AdBrite confirmed that recession is on online marketplace right here, right now.

The breaking news on the lay off on 40 per cent of AdBrite’s employees, including two executives two days ago by TechCrunch has really awaked us, finally.

AdBrite, one of the top five advertising networks according to Comscore, was said to underwent a major cut mainly to keep it afloat and profitable.

Why such top advertising network underwent a major cut?

Reading the colourful comments written on the TechCrunch blog post is mind boggling, as well as eye opening – while some blame the economy, others blame the questionable business model of Adbrite and today’s online advertising network as a whole.

I think that the economy plays a somewhat major role in AdBrite’s recent development. The recession affects AdBrite’s advertisers and publishers, and this eventually and logically affects AdBrite’s revenue count.

However, the economy is not the main culprit of the massive employee lay off, in my opinion.

I am no expert in online advertising, but I agree to some of the TechCrunch blog post commenters that think the AdBrite situation as a result of poor adversiting system quality, especially compared to Google AdSense.

While AdBrite business model worked well before, the pressure of recession push it to the situation where no mistake is tolerated – at least not in the way it was tolerated before.

The end result – lay off and the departure of whom some considered as AdBrite’s best team members.

The economy is sustaining and balancing itself

I view the AdBrite situation not as a negative outlook of online business as a whole.

Instead, I consider AdBrite case as a proof that the economy is sustaining and balancing itself – to offer everyone a fair(er) chance to offer better services and products.

The shake off also indicates that smaller advertising networks can perform better and more stable, as they are more nimble than AdBrite and the likes in responding the economy changes.

The AdBrite case is a very interesting case study to learn and follow, indeed.

And yes, the recession is pretty much in every facet of our live, including online business and marketplace. And, oh, the recession is here to stay.

What would you do about it? Drown in a negative outlook of your life or creatively take advantage of the situation?

I suggest you do pursue the latter.

Ivan Widjaya
Recession – enjoy the ride!
Image by whiteafrican.