The two companies aim to improve the experience of all users
More than likely you have heard about the upcoming merger of Elance and oDesk to form the most powerful freelance platform in the industry.
You might be wondering how the merger will affect you. The two announced the merger in separate emails to their clients, and like many of you, I am on both lists. This article pulls information from those two sources and others to fill you put you in the know.
The Elance email arrived first on the afternoon of December 18th and indicated that the merger was exciting news for all. Although arriving separately, the two emails were on point with each other. Both made it clear in the opening that the two former competitors would continue to operate on separate platforms with separate brands.
So why the merger?
Increased funds to be used for tech advances and education
According to Elance CEO, Fabio Rosati, the move was made to ensure the supreme freelancing experience, and the merger makes possible major technological investments to include tools for better searching, collaboration, and mobile use.
Gary Swart, oDesk CEO, pointed to the benefit of increased depth of "data science" that will make personalization of your experience possible. He also hinted that educational strategies to help freelancers develop their skills would increase, as the two experts in the field team up.
Although the announcement came yesterday, they anticipate that it will take another four months before the merger is complete. This, according to the two CEOs, allows you time and opportunity to participate in the direction of the new freelancing giant. Gary Swart of oDesk offers his personal email, making the request for input seem genuine.
Fabio Rosati of Elance emphasized the benefits of the move saying,
Our two communities have preferences and unique differences. We will honor the communities and support the two brands. But underneath there are synergies in investments in data science, trust and safety, mobile technology, education and many other things.
According to All Things Digital, together, they have $750 million in transactions with 10 million freelancers in more than 175 countries, and they will create the largest company of its kind in the industry.
In some ways, Elance will take command of the new organization, being the older company by six years, and with Rosati staying on as the CEO. Gary Swart of oDesk will work as a "strategic advisor." The companies are only miles from one another on the west coast, making discussion and collaboration over the years easy, their proximity a likely force in the move to unite.
They are close in size and demographics, with oDesk a little larger than Elance. Elance, however, has the edge in how much venture capital they have raised, nearly twice that of oDesk.
The real forces behind the merger
As in all industries, the dollar is the major force behind this merger of two nearly identical companies. Rosati pointed out that "Fundamentally, we have a shot at building a business on the scale of Amazon or LinkedIn or iTunes," revealing the real forces at work. The two companies aim to edge out other competitors such as Freelancer.com so that there is no real competition in the marketplace.
The two, which have yet to adopt a joint name, aim to crush rather than be crushed in a competitive market, and following the likes of Amazon is a good way to achieve it.
The New Year will likely see more mergers and buyouts, as burgeoning companies look to the competitive future and see collaboration as the likely route to dominance. Across the board, in all industries, 2014 will be the year of conglomeration. Elance and oDesk see this future, and are jumping the gun to have a moment in the spotlight before the year's end.
Whether the benefits the two companies receive transfer to the consumers and workers that use Elance and oDesk remains to be seen, and reactions from freelancers are mixed. There are always pros and cons in such a major shift, but somethings to keep in mind follow.
Takeaways for freelance writers:
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By Darin L. Hammond
Darin works for BlogCatalog, owns and writes at ZipMinis.com, and freelances as a writer and designer. Darin Publishes across the web on sites like Technorati, BC Blog, Blog Critics, Broowaha, Business2Community, SteamFeed, LifeHack, and Social Media Today. Find Darin on Google+.