A few months after the merger of Avito,ru, Olx.ru, and Slando.ru, which have formed Russia’s leading online classifieds company, market consolidation continues with Media3’s acquisition of Cian.ru.
A major Russian media publishing, commercial printing, and distribution group, Media3 plans to merge Cian.ru and Dmir.ru, a sizable classifieds group with seven thematic platforms – including real estate, travel, job offers, and others – which it acquired in late 2011.
Cian.ru will use Dmir’s software development , sales, traffic management, finance, HR, and PR teams . In the foreseeable future, however, Cian will be maintained as a separate site and brand “in order not to confuse the professional community,” Media3’s General Manager Maxim Melnikov explained to East-West Digital News.
The terms of the deal have not been disclosed, but Melnikov said that his fund owns a majority stake, “by far,” in the merged company.
Real estate online classifieds currently attract up to 22 million unique users monthly, according to LiveInternet figures cited by Media3. “This market segment is growing quite well, fueled by online advertising investments of approximately $80 million per year,” Melnikov told EWDN.
This $80 million corresponds to a limited but fast growing fraction of the total amount of advertising investments – both online and offline – in this segment, which Media3 estimates at $400 to 500 million.
From advertising to services
The media/banner advertising model is still predominant, but the service model is expected to gain more and more importance in the future. “Now most of realtors still use only PC, however they have begun migrating to mobile devices. iRealtor from Dmir’s realty section is already the leading mobile application for iOS and Android,” said Melnikov.
Among the new company’s competitors is Avito.ru. However, Melnikov is confident about his group’s leadership potential in the realty segment “despite Avito’s best efforts.”
“The experience of such countries as Germany, Sweden, Spain, the USA, and the UK, indicates that vertical real estate marketplaces have all their chances against horizontal classifieds portals. One could think of David vs. Goliath, but the difference in revenue between the two competitors is not that great and we are profitable while they are not,” Melnikov claims.
Media3 was founded in 2007 to manage the media assets of PromSvyazCapital, the investment arm of PromSvyazBank, a leading Russian bank. Its portfolio includes a retail outlet and kiosk network, a printing company and a range of print and online media – from popular weekly newspaper Argumenty i Fakty, to print classifieds magazines Extra M and Center Plus, to Internet sites Dmir.ru, Zarplata.ru and Aif.ru.
Another online property of the group, Tvigle.ru, is a major online video site.
The combined audience of the group’s online properties exceeds 20 million visitors per month.
