Marius Pahomi writes a post about Acasa.ro and their plan to close down the e-mail service. Behind this decision is a real need for liquid cash and a strong pressure to cut costs in 2009.
What happens right now in this online media group:
- – project managers are forced to cut costs (the case of Acasa.ro);
- – some people will be laid off and some projects will be closed down;
- – no new projects and no investments (only PR);
- – Boom Advertising is forced to terminate all the guaranteed contracts and to impose new conditions with less commitment;
- – growing tensions in the group between Boom Advertising and their own publishers: iMedia, Activesoft, etc (the need for cash is severe);
- – growing tensions among the employees – some of them already left, many of them think they’ll need another job during the crisis;
- – the psychological impact of the economic crisis has a bigger impact on Netbridge as the stakeholders are U.S. based and they need to force an exit (after 8 years of online investments);
- – the Internet companies are not self-sustainable – the costs are too high for some and during all these years they were funded from other operations (mainly real estate).
I remember this interview with Siminel Andrei (NCH administrator in Romania) saying something interesting about his business projects on the Internet: 10-20 ”will be successful, the rest – bankrupt”:
Reporter: How do you see the portfolio evolution of companies that you run?
Siminel Andrei: In general, bankruptcy. I never said that will soon bankrupt. From tens of thousands of sites and ideas on the net from Romania will be successful 10-20; or, statistically, the chance that some sites get in this category is small. So the chance to give bankruptcy is high for any site…
And this was before the crisis.
Please note that NCH Balkan Fund, L.P. AUM $540M is closed to new capital and New Century Holdings XI, L.P. AUM $1,375M is open to new capital only to the extent of replacing annual redemptions (this fund was NCH’s “flagship fund” with a broad-mandate portfolio in Romania also; listed equity with small allocations of fixed income, private equity and real estate”).