In a move that will consolidate much of the freelance economy in a single corporate entity, online freelance work platforms Elance and oDesk announced their intent to merge, forming a new company with a yet-to-be-determined name.
The resulting company will lay claim to more than 8 million freelancers and 2 million businesses in more than 180 countries, according to a release issued by Elance. Elance and oDesk will continue to exist as separate platforms even after the merger, though no longer as rivals.
The companies anticipate that joining forces will allow them to improve technical issues, such as matching professionals with relevant jobs, while streamlining internal processes and scaling their business.
"Just as Amazon reinvented retail, and Apple iTunes transformed the music industry, we will greatly improve how businesses hire and people work online," Elance chief executive Fabio Rosati said in the release. "This merger will create unprecedented access and flexibility for people to find job opportunities regardless of their location, and will allow businesses of all sizes to more easily access the best available talent."
In an email to freelancers today, Rosati echoed those sentiments, saying the merger would improve the "online freelancing experience" for the millions of users who depend on it for paying work. To do this, he said, he plans to make "significant investments in technology, including tools for a more effective job search, seamless online collaboration and improved mobile accessibility." Following the merger, Rosati will serve as CEO of the new company. Gary Swart, CEO of oDesk, will be a strategic advisor.
The merger is not yet a done deal, with regulatory approval expected sometime in the next four months. Although Elance's release makes no mention of potential antitrust issues, it's possible that federal regulators may look askance at a deal that would combine two of the largest online platforms for what Rosati calls "fractional jobs." The term describes individual tasks performed a la carte by freelancers as opposed to full-time positions with broader job descriptions.
While Rosati and others claim that the global turn toward fractional jobs is a net positive for workers and businesses alike, some professionals say platforms such as Elance and oDesk turn knowledge labor into a commodity, with price the main determining factor in who gets hired and who gets left out in the cold.
More From Entrepreneur
- American Airlines CEO: Fares Won't Rise if Demand Holds Steady
- The Maker of a Swallowable Pill That Takes Pictures Sells for $860 Million
- Vonage Buys Vocalocity in Bid to Deepen Roots in Small-Business Voice Service Space
- Mergers, Acquisitions & Takeovers