WebEx – known for hosting online web meetings – has agreed to purchase Intranets.com for a mere $45 million. To put that in that perspective, that works out to a mere $150 per customer (300,000 paying users).
An online meeting company buys small market intranet hosting business?!?
WebEx conducts online meetings and competes with Microsoft’s Live Meeting. Intranets.com hosts small business intranets (less than 100 employees on average). In their press release WebEx states that the acquisition will allow them to “offer companies of all sizes a comprehensive, cost-effective, on-demand web collaboration suite that includes both real-time and asynchronous capabilities.”
One of the real drivers behind the purchase appears to be Intranets.com own web and audio conferencing service which it launched early last year. As PC World puts it, “The move was aimed directly at undercutting Microsoft
I don’t blame WebEx for wanting to do away with Intranets.com. However, WebEx claims that Intranets.com will continue to run as a wholly owned subsidiary and plans to keep all 82 employees. Not surprisingly, WebEx is immediately taking over the Intranets.com web conferencing service. No doubt the price will go up sometime in the near future.
A little more perspective... if Intranets.com has 300,000 paying users, and judging by their pricing plan the average user price is about $10 per month, that equates to about $36 million in revenue per year. The company was sold for $45 million.
The sales price makes me wonder how viable the Intranets.com business has been. Very curious indeed.