What the Elance-oDesk Merger Means for Freelance Writers

Let's look at the Elance-oDesk merger

You may have missed it in the holiday crush, but a big deal went down right at the end of the year: oDesk announced it is merging with Elance.

Yes, I spend most of my time discouraging writers from hanging around these sort of race-to-the-bottom, bid-site platforms. But they’re mighty popular — 8 million freelancers are registered between the two merger partners — and their plethora of dirt-cheap gigs has posed a challenge to freelance writers striving to earn more than mad money.

I wanted to stop and talk about the Elance-oDesk marriage, because it signals some important changes coming down the pike, whether you use bid sites or not.

Why the merger happened

While the two companies have mouthed the usual reasons why mergers happen —  “We think we can do a better job this way,” the press release says, for both freelancers and the companies that hire them.

In reality, there are several big reasons why mergers usually happen:

  1. One of the companies is or will soon be out of money
  2. One or both of the companies is losing the competitive/branding war
  3. One of the companies covets the technology, executive brainpower and/or client list of the other
  4. One of the founding teams wants to cash out
  5. The market opportunity is shrinking and combining forces increases odds of surviving a shakeout

Any of 1-4 might be in play here — the companies are privately held, so their financial details aren’t public knowledge. oDesk’s CEO is the one stepping down, so that tells you who the weak sister is in this deal.

The one new fact they released: The two companies have $750 million in combined annual billings. That’s not what they make, but the total freelancers billed on Elance and oDesk combined in 2013.

I’m sure you can do that math: With 8 million freelancers, that means the average freelancer on Elance/oDesk makes under $100 a year. Before the platforms take their cut. Hopefully, if you ever thought these platforms were a place to make a living, you’re now cured.

But I digress. Let me draw your attention to #5 there. Because that’s the one that is a sure thing here.

A shrinking marketplace

It’s not a fluke that Elance and oDesk decided to combine forces. This merger is evidence of a sector implosion that’s happening for two reasons.

1) Junk content lost the Internet

It sucked, no one read it, and then Google did several updates to penalize keyword-stuffing content, culminating in last fall’s final blow: the Hummingbird update.

Now that cheapie content can’t get sites traffic, demand is plummeting for $5 articles. That’s why the call for quality content is skyrocketing, while demand for “link building” type articles sinks, as Google recently reported in this chart:

That’s bad news for bid sites, where scads of junk articles were commissioned at appalling rates. Let’s face it, startup websites commissioning keyword junk made up the bulk of the writing gig listings on places like oDesk, and were what fueled the growth of these marketplaces. Now, that fuel is vanishing.

2) The downturn ended

While demand for SEO articles is shrinking, my bet is that supply is, too. While many writers still gripe to me about “these tough economic times,” in fact, the U.S. economic downturn ended a couple-three years ago (depends on which economist you ask). The unemployment rate today is dead even with pre-recession late 2008.

Know what that means? Lots of freelance writers who turned to places like Elance out of desperation are gone. They’ve gotten jobs again.

There were a few years there where we had both huge demand for cheap SEO-focused writing, and a huge pool of writers hard-up enough to do it. Now, that moment has passed.

What’s next

I don’t have a crystal ball to tell you exactly what Elance and oDesk will do in the coming months as they integrate their merger and put the two companies together.

OK, I kind of do, because I spent 20+ years covering mergers and acquisitions.

The outcomes of big, high-profile mergers like these tend to follow a few pretty well-worn paths. Here’s what you will likely see:

Confusion and fear

Elance and oDesk freelancers seemed not to buy the happy talk. Both companies were flooded with hate mail from their member freelancers the minute the deal was announced.

The first comment on oDesk’s community site seems to sum it up: “This announcement fills me with dread.”

The initial phase of a merger is always marked by chaos and the wastage of huge amounts of time on speculation and gossip. Freelancers have been told everything will continue as it has been, with the two sites operating independently as before.

But everybody knows if that were true, there wouldn’t be a point to merging. This makes everyone anxious about how the merger will really shake out.

This feeling usually lasts a few months, and then everyone gets lulled into thinking maybe the status quo will maintain. As soon as writers start to relax, it’ll be time for the next phase.

Change

It always takes merging companies a few months to get the lay of the land, analyze the assets, assess the weak spots, and decide on a plan of action. Then, they start changing things.

There must be changes because the point of any merger is to create a larger, more efficient company with higher profits, so that the owners get even richer.

If the two companies were to go on as before, there would be no efficiencies realized and no additional profit. So steps will be taken to streamline the company.

Usually, one company’s technology and systems will be chosen and their team will run both brands, while the other team is laid off to save money. That will leave freelancers at one of the sites to learn new systems. Sooner or later, there will only be one headquarters. Cuts or changes in editorial staff are likely as well.

Often, in the end, they will loot one brand for its technology or client list, gut it, and then close it down to give the winning brand more combined power. Could happen eventually with oDesk.

It’s also more efficient to have one set of policies for how to operate — and that’s what’s got a lot of freelancers worried. Elance has a floor of $3 an hour, while oDesk has none, to name just one of their differences. Which philosophy will prevail?

My money’s on Elance’s, given the trend away from super-low paying gigs. Whichever way it goes, freelancers at one of the platforms will be unhappy to see their boat rocked. Employers may likewise drift away if they dislike the new regime.

One final point: Many mergers fail. If they can’t find efficiencies, Elance could decide to try to sell off oDesk, triggering another round of uncertainty and change. It happens.

More mergers

In the wake of this merger, other players in the cheap-hiring online space will be compelled to merge to compete with the combined Elance-oDesk behemoth.

When two of the biggest players join forces to form an 800-pound gorilla (so big it requires a federal review to ensure it’s not creating a monopoly), that sets off a consolidation cycle among smaller players that must scramble to fortify their resources and stay competitive in this new landscape.

With rapidly shrinking demand for junk content, expect to see some cheap-hiring bid sites go bust and disappear. This will be a smaller sector by year-end.

Takeaways: If you rely on any bidding sites as a major source of leads, beware. Changes are coming, and despite the press release happy-talk, they may not benefit you.

Diversify your sources of clients, ideally by prospecting to find your own clients and cut out the middleman, not by signing up for more bid sites or content mills. As Demand Studios’ parent Demand Media’s implosion shows, that sector is facing many of the same challenges as the bidding sites.

If you are earning pro rates and staying off these sites, rejoice. The coming year will be one of increasing opportunity for more sophisticated gigs. Sharpen your skills, up your marketing, and get ready for the boom.

What’s your reaction to the Elance-oDesk merger? Leave a comment and give us your own trend forecast.

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98 comments on “What the Elance-oDesk Merger Means for Freelance Writers
  1. DieselC says:

    I’ve always found great clients on Elance. oDesk is a nightmare with stingy clients looking for cheap freelancers. I dread if those clients start coming into Elance – which I think is happening? I see the crappy jobs coming into Elance already.

  2. Dan says:

    Hi Carol,

    You must have a crystal ball coz dang! You hit it spot on! Today Odesk have announced a raft of new “improvements” that are just features from Elance implemented on Odesk. There’s blood in the water and freelancers are in a frenzy of rage. But your article articulated the transition process very well, and what we are seeing is Odesk being subsumed into Elance. I can’t wait for your follow-up article on the issue.

    Thanks.

    Dan
    Dan recently posted…What is Content Marketing?My Profile

    • Carol Tice says:

      Hi Dan —

      Having covered mergers & acquisitions for years, I’ve found they follow a fairly predictable pattern. Hopefully the changes are no surprise to my readers, and they’ve already moved on to find clients in better ways. 😉

  3. Nekait Arora says:

    Hi Carol,

    I have been following this news and must acknowledge that this article of yours covers the most gossiped thing in market & things that were haunting my mind too.

    #5 states that to sustain and grow in market – I thought these two are the most influential and largest of the bidding portals worked. A merger of the two will create their monopoly in the market wrt other similar sites as Freelancer.com and Guru.

    My current thought process is a little awkward one: I am an oDesk connoisseur and recently an Elance expert too. My agency has two separate experts and after the merger, there is a possibility that only one of the two would be required.

    I assume the merger would conclude by creation of a new bidding portal and all the data from the two websites would be ported to the new version, with equity features form both the parties.

    Please let me know your thoughts about this fear.

    • Carol Tice says:

      Nekait, my thought is that bid sites are going the way of the dinosaur, at least for freelance writing. There is less and less writing work of the kind that’s suitable to post on bid sites — the type where you don’t really care much if the writing’s very good, because it’s mostly being written for SEO robots to index.

      The outlook is for less and less opportunity — that’s why mergers are needed. There is less pie to go around, and not enough to sustain all the platforms. That’s why we’ve entered a cycle of consolidation.

  4. Carol,

    Thank you for this great article confirming my own thoughts about the future of oDesk. I started evaluating all of the big name freelance sites in 2009. I found it too difficult to get established on the other sites so I stayed with oDesk. Before the Elance-oDesk merger, I had been doing real well working through oDesk.

    It is not just writers that are negatively affected by the Elance-oDesk merger. You wrote in part: “Then, they start changing things.” Those changes have already begun, and the outcomes for both freelancers and clients has been terrible as evidenced in the oDesk forums.

    Ron aka LanWanMan, Ocala, Florida USA

    • Carol Tice says:

      Hi Ron — I’d love to hear more about the changes you’re seeing inside oDesk. What’s happened, and why is it negative for writers? Appreciate your filling us in.

  5. Carol,

    One thing I’m finding strange about this merger is how both sites still maintain two separate websites to this day. I’d have thought they would have already had some sort of unified website by now. Why do you think this is?

    • Carol Tice says:

      Oh, I’m not surprised at all — having covered mergers for more than 20 years, I can tell you usually nothing happens after the merger for at least 6 mos-1 year. Then the hammer drops.

      Sometimes, they may find it useful to keep both platforms and brands going, more often not. We’ll see what they decide in this case…it’ll be a year in January.

  6. Arianna says:

    What a great article! I love that Carol tells us in no uncertain terms about the state of this marketplace. The graph tells both marketers and writers EVERYTHING we need to know about the future of content mills- i.e. that it has none. An inverse relationship like this indicates to stay away from the declining element, especially when there is such high demand for our writing talents!

  7. Dan says:

    I missed this e-mail in my inbox until now…but am happy to see it happening. These companies abuse and exploit writers who don’t know any better. Here’s to fairer rates for our hard work in 2014!
    Dan recently posted…Want Your Copy to Sell? Do This!My Profile

  8. Raspal Seni says:

    Hi Carol,

    Thank you for this post – you provided some nice insights about the merger, which I never thought.

    I also didn’t like the news when I heard it last fall, but I had already stopped working on oDesk. Elance I had registered but never liked bidding. On oDesk, I always worked for hourly jobs. The first one paid me $0.25 an hour. I got a few bucks an hour, later, but after reading some of your articles and getting advice from you, I just didn’t feel like working there. I still keep getting interview invitations but I ignore them.

    I agree with you that once two companies merge, they surely want to increase their profits and will do anything for that. They won’t think what happens to their users.

    We’ll see what happens with the merger in the coming months, but till then, I’d have gotten some good writing jobs without the middleman.

  9. I am in total agreement with you Carol regarding the collapse in the $5 article marketplace. I think the internet will be a better place for it too!

    But I don’t necessarily know if those same website owners/marketers are yet prepared to pay the money necessary to attract genuinely talented writers. Most of them are more likely to be scratching their heads wondering how they actually do this “content marketing” thing they’ve heard so much about.

    • Linda says:

      Brian,

      If I’m reading your comments correctly, I think you’re right. Many writers don’t know how to market themselves outside of bid mills because they don’t understand the concepts for marketing as a freelancer. I numerous forums when you mention it people accuse you of all kinds of things. But as Carol has taught in her Make a Living Writing blogs and through her Freelance Writer’s Den, learning how to market yourself as a freelancer to larger corporations and gain the bigger gigs is profitable. It takes time and work, and it requires you to steadily step outside your comfort zone to reach beyond your norm. But the rewards are huge. As 2014 moves forward, I’m thinking those who truly can market themselves as freelancers and find the better gigs are going to be much more successful as companies like oDesk and Elance and others start to wane.
      Linda recently posted…What Do You Say When an Interviewer Asks — Why Should I Hire You?My Profile

    • Carol Tice says:

      I think many of the startup websites that were hoping to use the mass-content/SEO approach will simply dry up and blow away…it’s doubtful they’ll start developing quality content.

      Meanwhile, established businesses that sell real products and services will realize they need truly useful, compulsively readable content — and pay for it.

      • I agree with you there Carol; the whole business model whereby you mass produce content with zero added value has had its day and it’s primarily real businesses and the smarter “online” businesses who are left.

        My main question was whether all of these remaining businesses understand content marketing properly yet and if not, there is scope for a ballsy freelancer to get in there and win some work doing both the content creation and the strategy.

  10. Tanya Adams says:

    I was told to sign up for Elance and ODesk when I first thought of freelancing. Guru was the other one that was mentioned to me. I was so confused as to how to start freelancing and am so glad I found the Freelance Writers Den and avoided these low paying gigs. I think that f I had started there, I would have been totally disillusioned about freelance writing as a career.

    • Tanya Adams says:

      Carol, you explained the merger process and the aftermath very accurately. So accuratelty that I found myself having flashbacks from the many mergers I’ve been through as a writer in marketing departments. I would hate to be going through this as a writer for these bid sites. Thank you for helping me avoid that.

  11. Fayola says:

    I don’t use Elance as a freelancer, but I often hire freelancers (mainly graphic artists) using it. Let me just say it has helped me tremendously. Just starting out, my budget is tight and living outside the US, with a currency much weaker than the US dollar, those low fees you often speak about are quite high for me. It’s not for everybody, but it does provide a needed service.
    Fayola recently posted…The Most Important Step in Writing Your ProposalMy Profile

    • Rob says:

      Good point, Fayola

      I was able to survive on my Elance income because I live in an inexpensive country. When my son in Australia wanted to start a website, we found a designer and graphic artist on Elance. He couldn’t have afforded to make his site without them (or my free services). They both lived in India, so they made good money and he got good value.
      Rob recently posted…The power of words in 10 words or lessMy Profile

  12. Jawad Khan says:

    A very timely post Carol.

    I think the only people who regularly make big bucks on Elance and oDesk are programmers, web designers and developers.

    For writers, these have never been lucrative platforms.

    And I am quite certain that in the coming years, as more businesses realize that cheap SEO articles don’t work anymore, these platforms will effectively be limited to technical IT professionals only.
    Jawad Khan recently posted…6 Reasons Why You’ll Always Struggle to Find Blogging Ideas (And What To Do About It)My Profile

    • Carol Tice says:

      Interesting observation – you may be right that these platforms work better for other types of freelancers. We know many writers have had a negative experience with them.

  13. Ronna DeLoe says:

    Carol, thanks for this post. I am an attorney and a freelance writer. When I got a lot of legal work, I stopped working on Elance. I was thinking of picking it up again in a few months, but now I’m concerned because of the merger. I never did like oDesk — never liked the format and didn’t care for the cheap wages that were offered. There are a lot of low bid offers on Elance too, but I avoid them. I chose a few clients after they chose me and I just stayed with those clients. My concern is, did they raise the % rate? I believe it was 8.75% that Elance collected — are they collecting more than that now? Thanks.

    Best,
    Ronna
    Ronna DeLoe recently posted…My book Serenity at Two Lights and Other Social Issues is still available. Makes a good gift!My Profile

    • Carol Tice says:

      I feel like I read that perhaps rates might be changing, but haven’t seen anything definitive. Maybe Elance’s CMO who commented above will weigh in, or one of my readers who’s using Elance and getting their emails.

  14. Lise Carter says:

    Carol, I’ve been following your blog for some time now, and I love your no nonsense approach!

    I agree with Tom though, I myself have used oDesk and Elance for a few years, quite successfully, getting well paid freelance writing gigs and social media management gigs – it’s all about knowing what to look for in a job posting and which clients to work for.

    I think the merger is a good thing, as you indicate in your post, it is only going to remove more of the lower paid gigs that some companies think are fair.

    I welcome a change in the outsourcing market that sees freelancers getting paid what they are actually worth!

    Take care
    Lise

    • Carol Tice says:

      It’s not that the merger will shrink the number of low-paying gigs, but vice versa…the merger is happening likely because the number of low-paying gigs IS shrinking, so there are fewer listings to go around, and the industry has to get more efficient to remain profitable on the lower interest.

      I would imagine that MANY wannabe online ad-click revenue based startups have seen their revenue shrink or evaporate altogether with the Google changes, and that means fewer companies that can offer even a pittance to writers.

  15. Rob says:

    I agree with most of what you write, but question whether or not the recession is really over in the U.S. Temp jobs are on the rise and over-qualified workers are still taking menial jobs. Even menial jobs pay better than what you can make on bidding sites, though. That’s one reason why many people are moving to Central/South America and Southeast Asia and taking up freelancing. Ironically, the bidding sites don’t pay enough to live comfortably even in those countries.
    Rob recently posted…What’s Up with Marijuana, the Evil Weed?My Profile

    • Linda H. says:

      Rob, it’s true the recession isn’t over in the U.S. and for the most part the jobs created have been part-time, temporary jobs or more low-paying jobs. However, the result of the recession has opened the door to a freelance market for those who know how to connect with higher-paying corporations preferring quality writers with excellent skills. I’ve not been with Elance or oDesk, but I have participated in bid-mills that truly unrate your services by creating competition for clients who pay low fees. Not realizing what I was doing, I’ve actually underbid myself and kicked myself afterwards. I know better.

      Carols’ tips are spot-on about low-paying content mills that require your time. Learn from her or a number of other successful freelance writers to market yourself to clients who’ll pay higher prices for quality work and get paid what you’re worth. The mental defeat of working for long hours for low pay is worse than devoting a little more time to finding better markets and getting great gigs. And I’ve spoken to people who’ve moved to the U.S. from those other countries and despite all our pitfalls, the U.S. has a much stronger economy than those countries. You’d fare better here and marketing for higher paying gigs than moving.
      Linda H. recently posted…What Do You Say When an Interviewer Asks — Why Should I Hire You?My Profile

      • Rob says:

        Two young expats came out of the blue and offered me coffee recently. Both wanted to know how to make better money freelancing. I referred them both to this site and a blog I wrote awhile ago, Starting from Scratch, in which I write about my slow crawl from Elance and Demand Studios to better paying assignments.

        Not everyone who freelances is from the United States and not every freelance writing opportunity comes from the United States. I get most of my work from Australian companies. I don’t agree with your blanket statement that the U.S. is better for everyone. It’s a big world and there are a lot of advantages to exploring it. Some prefer expat living, while others choose to return to their home country. It’s a matter of personal choice.

    • Carol Tice says:

      The thing about recessions is that whether you feel it’s over is so subjective. Still out of work? Not over.

      Economists look at the 10,000 foot level, and from there, from big data like unemployment, it’s over.

      I mention just because I’d like writers to get out of the doom and gloom mentality and blaming macroeconomic factors for their lack of earnings. There is plenty of opportunity out there.

      That’s kind of depressing to hear that bid rates don’t even work where you’re living! But some people obviously are succeeding on bid sites, or they wouldn’t have so many members, and we wouldn’t hear reports that some writers do earn a living on them.

      • Rob says:

        I was able to scrape by, but I have a family to support and was working 7 day weeks. A single freelancer I know can live comfortably, but can’t afford to save enough money to return home for Christmas. He was thrilled when I got him a gig writing for a travel site I quit writing for because they didn’t pay well enough. It seemed like a lot to him.

        To be fair to Elance, it was like an apprenticeship for me. Another expat I met wanted to start freelance writing, but didn’t have any experience or a portfolio. I suggested trying Elance and told him how I was able to get assignments there by pitching ideas rather than bidding low.
        Rob recently posted…What’s Up with Marijuana, the Evil Weed?My Profile

  16. Rich Pearson says:

    Hi Carol,

    Thanks so much for covering our merger announcement so thoroughly . . . and thanks to everyone’s thoughtful comments. I’m obviously biased as I work for Elance, but we believe combining the two companies will help freelancers and clients. As Bex mentions, we plan to differentiate the two sites while also combining our marketing efforts to attract larger clients and more work.

    Obviously, the above comments are only words at this point, but please stay tuned as I think you will like where we end up.

    • Carol Tice says:

      Thanks for stopping by, Rich — and we definitely will be following what happens.

      Maybe you could give us a sense of how the two sites will be differentiated. Apparently some writers have the sense that writers may all end up on Elance, with all the oDesk writers needing to move over. Any truth to that?

      • Rich Pearson says:

        Hi Carol,

        There isn’t any truth to this. The merger isn’t expected to be finalized for a few months – once it is official, we’ll need some time to put our differentiation plans in place after which we’ll be transparent about our plans. Until then, it’s business as usual on each site.

  17. Matt Schmidt says:

    Back in 2005 About.com was purchased by the New York Times and then sold last year. Content Mills have been dried up through the series of algorithms. Things change and they happen quickly with the internet. Find your niche, develop a strategy, and show your greatness is how it needs to be done.
    Matt Schmidt recently posted…LPM ep 023 : Spam and LinkedInMy Profile

    • Carol Tice says:

      Oh yeah – thanks for reminding me about how NYT spun About back out — great example!

      I’d add to your tips — and be diverse. Don’t let anyone one platform own your income, because it could shrivel up, change, or vaporize altogether.

  18. Tim says:

    Carol,

    Just read your piece on the Elance-Odesk merger and loved the detail and analysis. I love the economics of business and markets, and was very intrigued by your analysis. When I started looking for writings gigs online last year I did set up an Elance profile, but quickly left it when I read through your email course, choosing instead to focus on my own content and just polishing my writing skills. Thanks for doing the math and explaining, both in your course and this article, that these places are a waste of time.

    I will say one thing for Elance: I just landed a temporary job that pays $50 an article with the potential to move up to $100/article over the course of 3 months with a reputable news site and I did come across the job on Elance. I was shocked to see these guys looking on Elance, but was happy enough to apply since it was a job that sounded really cool. However, I think this job is a very rare one for the reasons you’ve noted in your article.

    What would you say is the reason reputable, high profile news sites willing to pay this kind of money look on Elance if the site promotes, overtly or inadvertently, cheap content?

    Keep up the great work!

    TIM

    • Carol Tice says:

      Tim, as it happens, I’m sitting here writing an article on deadline, right now. It pays $2000 for 1200 words.

      $100 is not a great rate for an article! But bid sites and mills have given many writers a warped view of what an appropriate rate is.

      And whatever that ‘reputable news site’ is, shame on them.

      I haven’t written an article for $100 in a long, long time. Even back 6-8 years my absolute floor was $300.

      Taking the time to find the markets that pay real rates can make a huge difference to your lifestyle — lot less work for a lot more money!

  19. This happens with other companies as well, not just writing. Lane Bryant bought out Fashion Bug, with the promise that the Bug would remain open. Nope. The Bug’s days were numbered the day they were bought. Too bad, too. I liked Fashion Bug better because they had the kind of lingerie pretties I liked, as well as clothes that simply fit better than the buying company.
    D Kendra Francesco recently posted…How to Manage a Revolutionary Idea: Make a Plan, Not a ResolutionMy Profile

    • Carol Tice says:

      Exactly. They always say that at first, to avoid panic and hostility. But come back a year or two down the line, and usually, the acquired company has been mostly assimilated, like the Borg in Star Trek.

    • Carol Tice says:

      Exactly. We’ve all lived through mergers before, so we know how they play out. We hear a lot of promises, and a year or two later, they’ve consolidated the business. Because that’s the real point of mergers.

  20. Hello Carol,

    Thank you for this VERY helpful article. I had not caught that the two companies had merged (the fact that they did it over the holidays shows that they probably wanted to mask their actions). Your math and helpful information was straightforward and illuminating, and you finally convinced me of what I long suspected: those sites are junk. Here’s to a 2014 where I never use those sites again.

    Thank you for a great post

  21. I have accounts with Elance, Guru, and PeoplePerHour, but I haven’t filled out my profile or looked much at the jobs, as I figured my own web site was more important to complete first. When I have time I might fill them out to try your “lurk, don’t work” strategy, just to maximize exposure, but even that is not on my radar yet just because I’ve been too busy! For that reason the merger means very little to me (probably a good thing!), but it’ll be good to keep an eye on it just to see how things develop. Thank you for applying your journalism skill to analyze the situation for us, Carol!

    In all honesty I prefer Twitter to any content mill or bidding site. I found two great clients on there before my own web site was even complete. 🙂

  22. Oludami' says:

    Perfect timing, Carol!
    I got this question on my ‘Quora blog’ (as a comment on one of my posts); “Which are the best freelance sites, for example odesk, which pay writers in €&£?” So I gave a little reply and directed him to this post. I hope he learns better from this post – and the entire blog.
    Thanks for this!
    Oludami’ recently posted…How to connect deeply with …My Profile

    • Carol Tice says:

      I always think it’s funny when I run across conversations like ‘which mill is better, X or Y?’ or “Is Elance better than Guru?” Like somewhere there is a good content mill, or a site where biding against 100s of others don’t result in too-low pay. They are all in the same category.

  23. Excellent article, Carol! Great market analysis. It fills me with hope that the future will bring more value to our profession. Thank you. 🙂

  24. I got “cured” off Elance after the very first job. This client sucked up a bunch of my time, was incredibly difficult to work with, and then “disappeared” and I had to file a grievance to get my final pay.

    I will continue to write my own books, self-publish, and write for appreciative clients who are more than happy to pay for my expertise.
    Penelope Silvers recently posted…Scrap the Resolutions —Pick One Word for 2014My Profile

  25. Personally, I’m glad to hear it! I haven’t followed these developments because I stay away from content mills, but it’s about time these sites started disappearing. Maybe it does mean that people are slowly realizing that cheap content is just garbage in the end.

    Cheers to the rest of us trying to make a real living as professional writers! 😀

    • Carol Tice says:

      I think businesses that paid low for mediocrity have gotten what they paid for and less, given how Google changed the game on them. Probably many will be moving on to find the kind of writers who don’t tend to hang around Elance, who can give their business the authority and killer topics and headlines that really work to get them new business.

  26. Annie Kile says:

    Just the other day Elance sent me a customer service survey and I let them know I no longer use their services due to the (as you so well put) “$100 a year” factor. What disturbs me most about Elance is that they actually fostered a culture that promoted prospects to post RFPs with $10K expectations at $5 an hour rates. What did they care as long as they took their cut? Like many freelancers I did use the site when I first started out just to have something to point at.

    However, what I did suggest to Elance is that they might consider a “tiered” membership fee, with those of us willing (and hopefully) able to cough it up (not TOO much) to get professionally paid gigs – of course this would mean Elance needed to be able to deliver those gigs – and they’d also have to provide oversight outside of simply taking their cut.

    P.S. To be fair, I did find one simply WONDERFUL client on Elance (you know who you are 🙂
    Annie Kile recently posted…Business Sales: Three Common Sales Scenarios and How to Handle ThemMy Profile

  27. Erin says:

    Thanks for letting us know about this; I just signed up for oDesk in the last month. I didn’t like the “bidding war” atmosphere, but I wanted another “egg in my basket”.

  28. Karen J says:

    I appreciate the overview on the “how and why and what next” of this one, and for mergers in general, Carol.
    Way to bring it: “Write what you know”! 😉
    Karen J recently posted…Collected Drafts – Just Do It!My Profile

  29. Linda says:

    Reading this hit me in the face with a brick bat. I realized that I’ve been sucked into bid-site platform and that explains why the clients are low-paying. I’ve gotten some great ones, but when I charge 5-10% less for a job than I would through my website I see what’s wrong. Duh…

    I wasn’t aware of the merger, but I’ve survived a few and your comments are spot-on as to the 1-5 reasons why they happen. And, the outcomes following the mergers. It also explains why I’ve been inudated with writers coming to me for work, thinking I have extra to go around. Surprising.

    Great tips and insight as to what’s coming down the pike. Opportunity is prime for good freelance writers. I reviewed content just recently that was poorly written and made me cringe, so I know I can do well. You just bolstered my motivation for a more robust marketing campaign. Thanks!

    Love this post. I obviously needed to read it and it’s jam-packed with great information–just what I expect for you now Carol.

  30. Wow. I hadn’t heard of this. I never used oDesk, but I did use Elance/Guru for a while, and learned how to separate the wheat from the chaff to find 9-10 very good and very long-term clients. (Also had several one-off projects that were OK…) But I also learned to market myself very successfully, and now 95% of my client work is via social media, traditional networking, referrals, and repeat business. I “peek” at Elance and Guru every once in a while, primarily because I think that I just might find a few more really wonderful clients like I already found there.
    But now I just don’t even have time to write bids–especially for cheap stuff.
    Thanks for this info. My recommendation would be to learn how to market yourself, and get out there and do it!
    WritingItRightForYou recently posted…Pith and vinegar / Piss and vinegarMy Profile

    • Carol Tice says:

      Right on!

      Maybe you’ve spotlighted yet another reason for diminishing interest from writers — they got clients off bid sites, built relationships, and now are too busy with client work to sit around speculatively bidding for more bid-site gigs.

  31. Lynn says:

    Thank you for this valuable information, and for letting me know that I’m moving in the right direction.

  32. Steve says:

    Elance already has started to charge freelancers for “perks” that were free before. You need a paid account to see the high/low bids.

    Their 8.75% fee on job bids wasn’t enough for them, I guess. (The way they figure them is kind of interesting and they don’t promote it consistently in their documentation. It’s not a pure markup, like sales tax???!!!)

    Thanks for the article, Carol! Great information and a nudge to all of us to get out there and do more personal marketing!
    Steve
    Steve recently posted…When the Writer’s Block Just Won’t ComeMy Profile

  33. Hi Carole,

    Everything you say is true, as far as it goes. Here’s another take on it. Whether you like it or not, these sites and others like them are obviously filling a niche in the marketplace. Some people shop Nordstrom’s boutique, some shop the basement, and others go to thrift stores. Between these two bidding sites they are accounting for 5.9% of the marketplace, if you believe their stats. There are tens of thousands, even maybe millions of writers looking for clients, and hundreds or thousands of businesses looking for writers, and these two platforms have found a way to bring the two together.

    While contacting and contracting with businesses directly might be the most lucrative for the writer, it seems that there is a demand for a quick, easy and relatively painless place for buyers and sellers to connect. Businesses are looking for the lite version of the employment office. Writers want to connect with those businesses. Writing query letters, and the process of reading and qualifying them is a hit-or-miss time-consuming strategy.

    So far, neither the writers nor the businesses have some up with a viable, cost-effective solution to that problem that is any better than Elance or Odesk. Until they do, that business model is still workable, and will continue to marry both markets.

    Some have tried, in certain markets. There is a grant writers bid site that posts essentially the same jobs found on Edesk (or is it Olance). They charge the writer/subcontractor 25%. That makes 8.75 or even 10% look pretty good.

    Not every one lives in markets or works in niches that respond to traditional marketing. We can whine about the rates and working conditions on these sites all we want, but until we find a way to compete with them and have some sort of market clout, they will continue.

    Just my take.

    Becky Baisch

    • Carol Tice says:

      Hi Becky —

      Oh, certainly, these markets were born and grew because writers are lazy about marketing. They offer a convenience, and many writers were willing to give up revenue for that.

      But I think market conditions have changed on these platforms, which is why a merger was needed. I think there’s shrinking interest both from writers and from businesses of doing business in this way. At this point, more and more writers can market from their own writer website and don’t need an Elance to be a place for them to get found online. Many writers have gotten day jobs as the economy recovered. And as I noted above to Neil, businesses haven’t all had great experiences using these platforms, and word gets around about that.

      Likely there will be continued call for this sort of platform, but in the future there will likely be fewer players who survive to manage the remaining, smaller volume of gigs getting done in this bidding format.

      I think fewer and fewer writers want to invest time writing bids for gigs they may or may not get, in a setting where they’re competing with dozens or hundreds of other applicants.

  34. Julia Rymut says:

    Hey Carol,

    This is a great article–not only did I learn about Elance and oDesk but I learned about mergers and acquisitions as well!

    There were 2 parts that struck me most. First of all, it hadn’t occurred to me that these giants may not be financially solvent. That shines a whole new light on their business.

    And secondly, your description of how the companies will make financial and re-structuring decisions based on the company’s needs (and with no consideration to the people those decisions impact) is grimly accurate. Giant corporations regularly change their policies without any notice. It’s interesting how they want everyone to check “I accept” when we sign a contract with them but their end of the contract is never binding.

    Thank you, Carol. I really enjoyed this article.

  35. Allena Tapia says:

    Carol, you continue to be one of the smartest voices in this industry! Thank you for covering this merger and shedding some light on it.
    Allena Tapia recently posted…Professionalizing Your Writing Business in the New YearMy Profile

  36. Amen, Carol.

    Freelancing has gained a lot of credibility over the past several years. It’s no longer seen so much as not being a “real” job. As a matter of fact, the Freelancers Union notes that as much as 30% of the U.S. workforce can be categorized as freelancers, in one way, shape or form.

    But, sites like ODesk and Elance seem to have tried to keep freelancers down, promoting low paying gigs to client-types who, apparently, see little value in the services they contract. The thinking is if they can get it for a buck and a quarter, so much the better. That also promotes the “It’s good enough and good enough is fine with me,” type of thinking.

    Sure, business sense says to keep an eye on expenses. But, good writing is an investment and one tends to get what one pays for. A direct response writing gig that brings in a bazillion bucks for a client when the client pays a paltry sum seems a bit out of whack to me.

    Okay … I’ll step down off my high horse now. Well, in a minute. Cara is correct in writing, “… it’s not smart to rely on anyone else to get you business, especially these sites, which could change any time. Much better to do your own prospecting.”

    As freelancers, we’re responsible for our own destiny and bank account balance. Nobody said this was easy. If it was, it wouldn’t as rewarding, beyond money, and everybody and their brother (or sister) would be doing it.

    Okay … now I’ll get off the horse. Really.
    Neil Tortorella recently posted…Content Marketing: A small business primerMy Profile

    • Carol Tice says:

      Hi Neil – great to see you on here!

      I think at this point MANY businesses have tried the bid-site route, gotten mediocre results, and have realized the old-fashioned way is what works — hiring and managing a freelancer in your town that you can trust, communicate with (no language barrier, as there often is on these bid platforms), and get to work until you’re satisfied.

      I’ve heard a LOT of stories of companies having to give up and start over when they got substandard work and then the contractor vanished off one of these platforms.

      This may contribute to the shrinking opportunity side of the equation – companies that have been burned moving on and not posting on these places anymore.

  37. Bex says:

    Based on the communications I’ve received from Elance about the merger, it seems to me that they intend to differentiate the sites based on the types of jobs posted. My guess is that creative pursuits such as writing and design will remain on Elance, while jobs in the administration categories will go to oDesk. All speculation, of course, but that seemed to be what they were saying in their less-than-straightforward emails about the situation.
    Bex recently posted…The Prostitute, the Pimp, and the ParentMy Profile

    • Carol Tice says:

      Interesting — so all the writing jobs might migrate from oDesk to Elance, and all those writers would have to switch, or give it up? We’ll see if that happens and if so how that goes over.

      Thanks for sharing your reaction to Elance’s communication about it!

  38. I cringed when I received the email about the merger. Over the last few years I stop by these two sites when work is low. It does help to fill in a gap or two. However, I do not have much success on elance, but have developed some relationships with odesk that have led to ongoing work. The merge sounds nothing but bad to me and you helped me reason out my own fears about the matter. I’ll have to go beef up my website and try to get leads through other means from here on out! *smile*

    • Carol Tice says:

      That seemed to be the universal reaction, if you read through the comments on their forums. Dread, fear, anger, confusion. Nobody went “Yay, that’ll be awesome for freelancers!” Despite the fact that that was what the CEOs said.

      I think all the hoops these places make you jump through are tough enough — and now change will come, which is going to be stressful to go through. Maybe that will be the inflection point for a lot of writers to realize they’d do better getting their own clients. I’ll be curious to see how many users they say they have in a year…though I think we imagine those numbers are pretty squishy. As Cara notes, there are probably scads of dormant users registered but doing no business on the platform in reality.

  39. Anca Dumitru says:

    Excellent post, Carol! I wasn’t aware of the news. Glad to hear there’s more coming up to keep clearing the path for more quality rather than quantity.

    “The coming year will be one of increasing opportunity for more sophisticated gigs. Sharpen your skills, up your marketing, and get ready for the boom.”

    Doing that as we speak through guest posting, the modern day PR, and prospecting.
    Anca Dumitru recently posted…Top 10 Slideshare Content Marketing Presentations of 2013My Profile

  40. Janice says:

    When I started freelancing a year ago, I got copywriting jobs through Elance. It was a good place to begin, but I knew that this wasn’t where I was going to be for the long term, simply because of the prevalence of extremely underpaid work. You’ve made a great case here, Carol, about how these bidding sites are either going to improve and survive or collapse under the weight of their cut-rate business model.
    Janice recently posted…A little Hummingbird told me…My Profile

  41. Cara says:

    Thanks for your insights on this. I know you scorn these sites, so it’s always interesting when you mention them.

    I do feel compelled to point out one thing that’s missing from your calculations. Yes, on average, less than $100 per freelancer is billed. But how many of those 750 million freelancers have ever actually won a project? Based on my experience, not many. Most people send out a proposal or two (if that!), don’t win, realize it’s not as easy as they thought, and quit before they ever get anywhere. Like the rest of the world, most of the money is in the hands of a few. (Personally, I billed about $25,000 on Elance last year.)

    Like anything else, you get out of it what you put in. If you compete on price, yes, it’s a race to the bottom. But nobody says you have to do that as a freelancer. I’m usually the highest price on every project I submit a proposal for. But I still win, because I offer the value to back that up.

    You’re right about one thing, though: it’s not smart to rely on anyone else to get you business, especially these sites, which could change any time. Much better to do your own prospecting. That’s something I need to do more of in 2014.

    • Bex says:

      My most recent email from Elance was to let me know they are changing the way they allocate bids, so that those who do not have complete profiles won’t be able to bid as much using the free account. A step in the right direction, perhaps?
      Bex recently posted…The Prostitute, the Pimp, and the ParentMy Profile

    • Carol Tice says:

      There definitely are exceptions, Cara — I’ve heard from a couple of Elance writers who were managing $50-60K on there. But seems like it’s a real rarity that you can cobble a full-time living on it. And you’re dealing with all the middleman problems of often not being able to get the client access you’d really like to excel at the project.

      Seems like the best strategy if your using these platforms is taking those clients offline as soon as the platform permits. And being very selective about what you take time to bid on. I had a guest post on this a long time back:

      http://www.makealivingwriting.com/good-money-freelance-bidding-sites/

      • Diana says:

        Actually, it’s not that rare, Carol. I second Cara’s comment – i too make a descent living on both oDesk and Elance combined; and i am always the highest bid but like Cara – i win clients through value. And there are plenty of us out there; in various fields, too.

        I am a marketer (maybe that makes a difference, too!) – but even with writing, i have never written a blog post or marketing collateral material for $5 or something like that, as ‘advertised’ in your post.

        I am actually pretty surprised how extremely negative your opinion is about these platforms. Especially on Elance, there are plenty of good and high paying clients, writing category including.

        As for the math – you say “With 8 million freelancers, that means the average freelancer on Elance/oDesk makes under $100 a year. Before the platforms take their cut.” – really? Remember that many of the registered freelancers are not even active on the platforms. And then – even those who are active – not all of them succeed and work and bill.

        From Elance stats – for US alone for 2013, there were about 100K jobs posted in writing and translation category, 56 billion USD billed – even if we decide that all posted jobs were filled and fully paid (which probably isn’t the case), it appears an average freelancer charges $560 per job in the writing and translation category. If they were charging $5 per post, that hardly could be achieved.

        Not that i am saying one must be on oDesk and/or Elance – i don’t say that. With writing it is super better to go pitch clients directly, especially if you are in the US.

        What i am saying though is you should put everything in context and should take all possible angels before going into extremes. As both Elance and oDesk are not content mills sites like you portrait them. And maybe there are readers who are making up their minds about oDesk and Elance they just made a ‘ney’ decision based on one-sided information and may have missed a good opportunity doing so.

        Apart from this – excellent post. First time i see some good food for thought on the topic, different from the official press release reasons for the merger. Thanks for it – buffered your post 🙂
        Diana recently posted…When Is It Time to End a Contract with a Freelance Client?My Profile

        • Carol Tice says:

          I have said nothing about Elance and oDesk being content mills. They’re bid sites. Think everybody here understands the difference.

          I don’t think I’ve gone to any extremes here — just analyzing why the merger is happening. These platforms ARE notorious for many low-paid gigs. Certainly glad to hear you are finding and landing some of the better ones! Many writers report to me that’s real needle in a haystack stuff.

      • Cara says:

        Hi Carol,
        You’re definitely right about bidding selectively and relying on the platform as little as possible. I’m not sure what you mean about not getting client access, though. I talk directly with all of my clients. Once you win a project, Elance doesn’t limit how you communicate–you can use regular email, Skype, whatever you want.

  42. Thanks for great post, Carol.

    I signed up to some of the sites when I first started freelancing and got burned on one of them, not for much but it was a lesson learned the hard way. My accounts aren’t closed as such–I still get the emails to say there are new projects in my areas–but I don’t even bother reading them. I prefer marketing and finding my own clients.
    Alexandria Ingham recently posted…Why I Don’t Care About Negative Comments and What I Do InsteadMy Profile

  43. John Soares says:

    Excellent info and analysis Carol.

    Here’s another point for content mill writers to consider: with the market shrinking for the mills, so is the profit potential. The companies that are losing money could declare bankruptcy, leaving their writers with invoices that will never be paid.
    John Soares recently posted…Want to Be a Better Writer? Just Relax…My Profile

  44. Great stuff as always, Carol!

    I signed up at Elance on my first day as a freelancer, took one look around and said “What is the point of this?” and left the next day. As always, it’s about knowing your worth, putting the graft in and learning your trade. If you do that, there’s no need to use content mills and the like. Hopefully the merger will mean that they will focus on quality and take the likes of dodgy SEO tactics and Google’s algorithm updates into consideration when they review the kind of jobs that are posted on these sites. Like you and everyone else who visits this site, I want writers to be able to forge a career and earn money from what they enjoy, without fighting the dragon that is the content mills and underpaying clients.

  45. I totally missed this news! Thanks, Carol. Hmm… twice as many sucky jobs in one place? I suppose the benefit is that it’s twice as easy to steer clear.

  46. Samantha says:

    A very informative analysis for both writers and their clients. Thank you for this.

  47. Daryl says:

    Since I had signed up with both Odesk and Elance, and haven’t closed my account yet, I did get the notification that they were merging.

    Personally I was quite surprised. I also can’t see much of a reason for these two platforms to merge unless one (or both) were really struggling.financially. All of the news put out by these two companies boasted of how well they were doing so I’m pretty shocked that they had to go the merger route.
    Daryl recently posted…My Crazy Comment Marketing StrategyMy Profile

    • Carol Tice says:

      And I’m not, because I get an announcement about another one of these platforms opening about every week. The marketplace of these is overcrowded, the number of junk-content gigs is shrinking…it all adds up to consolidation/merger time.

      And as you note – there is only one reason to merge. I can’t wait to revisit this in a year and see if both brands are still alive or if they’ve consolidated it. Because running and promoting two brands is of course less efficient than marketing for one, so often the acquired branding will go away. We’ll see what they do.

  48. Tom Crawford says:

    Thanks for covering this, Carol. I actually followed the news as it broke (during the Christmas period). I agree that writers should avoid the low paying jobs on those sties, but I have found some very well paid gigs over the years, so I dip in every so often.

    In any case, your comments on the shrinking marketplace ring true. The Google updates are good news for professional writers, as the junk content is expunged from their listings.

    It will be interesting to watch the merger unfold.
    Tom Crawford recently posted…21 Ways To Get Free Traffic To Your Website or BlogMy Profile

    • Carol Tice says:

      Right on, Tom — I think in general, the big takeaway is this merger is a sign that it’s getting more difficult to successfully run one of these platforms where writers bid for rock-bottom paid assignments…and that’s a good sign for those of us who want to earn a real living. 😉

  49. Kimberly Jones says:

    Great and informative article! I wrote a few articles for Demand Media back in the day when I was just getting my feet wet with freelancing. I signed up for Guru but never did much with it. Elance I actually spent quite some time on and noticed that almost ever project I bid on went to someone whose own profile was riddled with spelling and grammar errors. This told me that price was king and I would never get a job because I’m not cheap and, frankly, I know syntax.

    I finally did get one job on Elance from a guy who told me that he had paid no less than five people to write his press release and they all mangled it. He was offering me $15, which was $5 more than he paid them. I told him what my normal press release rate is and told him he could pay me to do it once or spend more than I charge to have draft after draft of crap.

    In all, the amount of time I wasted creating a stellar profile and bidding myself out, just to get one job, put me at a loss. Maybe people will start to value quality again and maybe things will change. Until then, I agree with Carol: Marketing is hard but it’s the only way to get the jobs you deserve.

  50. Tammy says:

    I usually do not reply to articles, but I am a freelancer on both odesk and Elance. I am not a Writer, but rather a a Graphic Artist. The first thing I thought when reading this is, “stop bidding on jobs that are below what you want to make.” Both sites offer opportunities to meet new clients, that is not a bad thing. Companies that want quality, will pay for quality. One experience trying to communicate with a China or Pakistan freelancer will cure most clients desire for cheap work. A good freelancer has regular clients, a website, social outlets, and other revenue streams, but these sites offer yet one more. The more revenue streams you have, the better chance you have of doing this “freelance” gig full time, from home.

3 Pings/Trackbacks for "What the Elance-oDesk Merger Means for Freelance Writers"
  1. […] for freelancers who still use the two sites as their main source of income. This detailed post from Carol Tice explains the many reasons why. To me, it means that two entirely separate and distinct […]

  2. […] This does not mean that freelancers have bought into the story.  There are obvious differences in functioning of Elance and oDesk and so the amalgamation has been a matter of great debate in various freelance jobs forums.  A blog post on Elance announcing the change, received comments that did little to hide the displeasure of freelancers on the merging of the two online marketplaces. No one has probably captured the real essence of the merger better than Carol Tice at Make a Living Writing. […]

  3. […] What the Elance-oDesk Merger Means for Freelance Writers […]