Thursday, September 13, 2007

Eons wobbles – what lessons for the 50-plus social networking crowd?

As reported in, on Monday Eons founder Jeff Taylor called together his staff and had a moment of remembrance for the 24 colleagues he had just laid off – about a third of Eon’s employees. In addition to these 24 staff members, another 12 people “found different opportunities and chose this time to move on.” If this is correct it means a total reductions of 36 staff which is close to half the company. Eon’s hasn’t confirmed these additional 12 departures.

The layoff story was first reported on Tuesday in Mass High Tech.

So what is going on?

The official explanation is that the company was bloated with staff, with too many projects consuming too much resources. This cull of employees is a positive act of: “focusing in on what works and jettisoning all the stuff". The "going back to basics" - "sticking to the knitting" argument.

Eon’s Senior VP of strategic development (one of the lucky ones with a job) stated that cutbacks were intended to help Eons focus its efforts on the areas of greatest traffic; mostly its social-networking and community-building activities found mainly in its people section, with stuff like blogs and dedicated user groups.

Eons’ site has nine major categories: people, fun, love, money, body, lifepath, obits, games, and travel. It appears the company will no longer pursue areas like obits (offering online obits was a core premise of Eons at its founding) and travel, which are time consuming and costly to keep updated with fresh content.

From afar it seems to me that the site is cutting its costs by retrenching into user-generated content. Content costs, always has, always will. The business model now becomes dependent on the proposition that the 50-plus want a place to communicate with people of their own age. I am not convinced.

A while back I posted an item about social networking and predicted that there would be opportunities for one or two large generic 50-plus social networking sites and a crop of cottage industry businesses. I hope we are not seeing eons make the transition towards the cottage industry model. Time will tell. Dick Stroud

1 comment:

Arjan said...

Dick, you are not the only one with considerations. I will spare you my Dutch blog post, but this one of a blogging colleague is in English.