Many years ago I ran a subsidiary of VA Linux called OSDN. OSDN consisted of 11 websites and three businesses. These 3 business were the e-commerce business Thinkgeek, a subscription business called Animation Factory and a media business consisting of Slashdot, Sourceforge, Freshmeat, Newsforge, Themes, and Linux.com. All 3 businesses became profitable towards the end of 2003 and had an annual revenue in 2004 of approximately $24M.
Today, the business is known as Geeknet. Much of the old OSDN has gone, yet a few of the key assets remain. Animation Factory was sold several years ago to Mecklermedia. What remains today is the e-commerce business Thinkgeek and a scaled down media operation consisting of the sites: Slashdot, Sourceforge and freshmeat.
Geeknet made many major changes in 2010, including:
1. Thinkgeek revenues grew 55% to $76M
2. Media revenues grew 11% to $18M
3. Kenneth Langone and the Geeknet board eliminated the entire media management team
4. Sold media sites: Ohloh and Geek.com
5. Moved it’s headquarters from California to Fairfax, VA, home of Thinkgeek
The growth of Thinkgeek is amazing and the team should be congratulated. The e-commerce business and the media business are two different businesses with widely different business models. With a 55% annual growth perhaps Geeknet should concentrate on this business and phase out and sell off the media business. I don’t know if this is Geeknet’s current strategy – if it is then keep an eye out for sales of Slashdot, freshmeat and Sourceforge. If it’s not, then perhaps it should be. AOL, Google, IDG and Ziff Davis would be a good fit for Geeknet’s media sites.
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