The deal of the year in Romanian online media

As for the impact of the deal in the online media industry, InternetCorp’s CEO says there are chances of unreasonable self-valuations like a couple of years ago, when a major US-based investment fund bought minority stakes into two Romanian online companies. “And this may freeze further acquisitions in the online segment for another two years”, said Seceleanu.

In terms of targets online advertisers aim for, no radical change is expected anytime in the near future - strong brand products, focused either on business, general news, women and entertainment.

“Social network advertising, for instance, one of the hype terms strongly discussed lately, failed to prove its efficiency in Romania or worldwide. Yet again, Twitter didn’t exist 4 years ago, YouTube wasn’t even launched 5 years ago and, 6 years ago, Facebook was still a wild idea of a Harvard student – so never say never”, Seceleanu added.

The valuation of the media and technology companies, he continued, was affected to a less extent by the economic downturn, at least in terms of multiples. But, considering the current EBITDA levels (which are less than 2008’s), the adjustment can be up to 50-60%.

The valuation of the company he runs was based on several factors, which were all taken into account. First, InternetCorp is among the few online publishers making a profit for the past 3 years and it has grown constantly in terms of market share, even in the rough 2009. Second, online still gets only a few percentage points of the overall advertising expenditure and internet penetration rate in Romania is still low even if more than 60% of the urban population are internet users.

“All of these are reasons that led us and the investor to trust that, in 3 – 5 years from now, InternetCorp will achieve a larger share of a larger market, hence the decent valuation”, said Seceleanu.

A piece of advice for entrepreneurs seeking to sell their business? “Don’t sell too early. Or too late. Don’t just sell – look for potential investment in the company also. Don’t sell the entire company, sell only a minority stake. Choose as partner an investment fund, rather than a strategic investor”.

InternetCorp is Romania’s leading independent online publisher, with a strong presence in the Business Publishing, Women’s Lifestyle and General News segments, where its online properties secure top positions. InternetCorp developed a portfolio that currently includes fourteen successful products in the Romanian online space, such as Wall-Street.ro, 9AM.ro, Kudika.ro, Yuppy.ro, Garbo.ro, Envy.ro, Condo.ro, CorporateNews.ro, Sotto.ro, Kidz.ro, Healthy.ro, Grace.ro, Delly.ro, Lazy.ro.