Big News in Online Freelancer Space: ODesk and Elance To Merge

Freelance oDesk Elance merge

Yes, it’s big news in the freelancer world.  oDesk and Elance today announced that they are merging.  The two giants of online freelancing marketplaces have both signed a definitive agreement to merge.  The deal is expected to close within four months, and is subject to regulatory approval.

Today, both oDesk and eLance run large online marketplaces where they bring freelancers and other service providers together with the businesses and entrepreneurs who hire them.   Elance has over 800,000 businesses and 3 million freelancers using it, from over 170 countries.  On oDesk, the numbers are over a million businesses registered, and nearly five million freelancers.

Together they say they will have 8 million freelancers and 2 million businesses in over 180 countries.

According to a prepared statement issued jointly by the companies today, the merger brings strategic benefits. These include a greater combined investment in technology and the ability to accelerate growth and scale as a result of combining forces.

oDesk had flirted with the idea of going public several years back, AllThingsD reports. But the company has apparently decided against that for now.

Today oDesk chief executive officer Gary Swart notes in the release, “oDesk is thrilled to join with Elance in order to innovate faster.”

The companies have a big vision — as in Amazon and Apple big.

“Just as Amazon reinvented retail, and Apple iTunes transformed the music industry, we will greatly improve how businesses hire and people work online. This merger will  … allow businesses of all sizes to more easily access the best available talent,” said Fabio Rosati, the CEO of Elance.

The two companies will continue to run separate platforms at odesk.com and elance.com. Today there are differences in how the two sites operate. For instance, oDesk charges 10% and Elance charges 8.75%.  Reactions to the news on the oDesk blog can be seen here, and reactions on the Elance blog can be seen here.

Fabio Rosati will serve as CEO of the combined company, and oDesk executive chairman Thomas Layton will continue in the same role of the combined company. Gary Swart, currently the CEO of oDesk, will act as a strategic advisor.

The name of the new company post-merger will be announced after the deal closes.

The companies are headquartered in Silicon Valley — with oDesk located in Redwood City and Elance headquartered in Mountain View, California.

Editor’s update: the above article was corrected to reflect accurate information about fees.

17 Comments ▼

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Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

17 Reactions

  1. This goes to show how the marketplace for freelancers and online workers are growing. If I am not mistaken, the industry grows like more than 100% year after year.

    Those are just 2 of the big ones. A number of other niche specific ones like 99Designs, Fiverr and full-time remote work oriented sites like Staff.com are also present and growing.

    It’s an exciting time for the industry of employment as a whole. I’m curious to see where this merger is going in the next few years.

    • Hi Carlo, It is an exciting time. I think many of the sites you mention fill unique niches. Fiverr for its very small jobs, many of those jobs, ahem, pushing the envelope of what’s gray hat. 99Designs is known for its design contests and design projects. We will see if all the sites maintain their niche appeal — or if this is just the first of a lot of consolidation in the industry.

      – Anita

  2. This is really good news and I am excited to see this! I wasn’t aware that a merger was even in the works for these two but I am happy that it happened and can’t wait to see the changes it brings.

    • Hi Ed,

      It was rather a surprise to me, too. Years ago I did some work for the Elance company (nothing recent) and I remember Fabio telling me they had weathered the dot com bust by adapting. Looks like they are adapting again, this time to grow.

      – Anita

  3. This could be huge!
    I wonder what this merger will bring in the future of freelancing industry. Odesk and Elance are already big to compete with Freelancer.com who just filed an IPO to AUS stock exchange.

    However, this could not be always a tragedy for those who disliked this news. Although I knew some freelancers from both sides were happy with this outcome. However, there are sites like Staff.com who is more focused in providing full time jobs to everyone around the world. It’s just a startup site though but its popularity is getting bigger and have attracted several clients already.

  4. Great article!

    I was shocked when I first found out through email. Still reeling from the news.

    The future of freelancing will not be the same again!

    – FF

  5. I got an email today from ODesk about the merge. I have a profile set up there, but it’s not a site I actively use.

    It will be interesting to see how this develops in terms of advantages for its freelancing members, whether those benefits will be tangible, significant.

    • Hi Ebele, it was interesting to see the reactions from both the Elance members and oDesk members. It was like each group liked things the way they are now, and the big concern of some is not to see things change.

      And then there are those who aren’t happy with either company, and I suspect nothing will please those people anyway. There will always be a certain number of those, with any freelance site. They just want to vent (which is their right to do, of course).

      – Anita

      • Change is a given, a necessity for growth. It helps all concerned if it’s beneficial (for all). | I can understand the fears of those who’d rather it stayed as it is, especially for those who (income-wise) rely on the site significantly.

        But, yes, there are those who will complain regardless. They’re best left to it.

  6. This is crazy! It’s like Coke and Pepsi deciding to merge.

    I know many freelancers who had accounts with both, so this simplifies their life. For those who were only on one site, it opens up more opportunities and brings more competition. Overall I think it’s a good idea though.

    • That was exactly my reaction at first, Robert — like, whaaat????

      On the other hand, Freelancer.com has been acquiring and on its own growth path. So maybe it’s partly a defensive move by those two against Freelancer and the many other freelancer sites out there. TJ just did a roundup of 32 freelancer sites – I wasn’t even aware there were that many! :)

      – Anita

  7. The comment that was posted is inaccurate and I wanted to address directly. All freelancers on Elance have access to a complete set of features to establish an online presence and immediately begin marketing professional services to clients with a free membership. It is also free to post a job on Elance.

    Our fee structure is very straightforward. Elance charges an 8.75% service fee to clients on every transaction. In exchange, we have worked to make Elance the safest and most trusted marketplace, guaranteeing payments for freelancers and work for clients. We also take care of worker classification and tax compliance.

    • Hi Lauren, I think the article above is correct, is it not?

      If the comment you are referring to is by one oDesk user, I have seen incorrect comments on both sites (oDesk and Elance), actually.

      – Anita

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