Should BetFair have acquired TimeForm (the publisher of horseracing ratings, form guides and analysis)? Niall O&#8217-Connor (a betting market expert) thinks that there is a &#8220-strategic mismatch&#8221- between the two. I&#8217-m republishing his hatchet job, below. (I hope he won&#8217-t mind that I quote him in full, this time.)

At the end of November 2006 Betfair acquired Portway Press Limited, the owner of Timeform, the world-renowned brand involved in the publication of horseracing ratings, form guides and analysis. It was suggested at the time that the acquisition had cost Betfair somewhere in the region of ?15m.

At the time of the acquisition, Betfair announced that Timeform would retain full editorial independence, but that it would bring capital investment, technology, marketing and communication skills to the table.

On publishing its results for the year ended 30 April 2007, Betfair said that Timeform had &#8220-made a small loss in its first five months of trading after acquisition&#8221- but that it was confident that it would generate positive returns in the near future.

One can only speculate as to what the strategic thinking behind the acquisition was. Presumably it was believed that an association with the prestigious Timeform brand would make Betfair&#8217-s horse racing services more creditable- whilst at the same time affording cross-marketing opportunities.

Flawed logic at best&#8230-.

First, it is widely acknowledged that Betfair has given rise to, and nurtured, a culture of trading. Betfair traders do not typically run to form books, but rather, they let the Betfair market guide them, in the belief that it reflects all known information. (Betfair, with its lower transactions and information costs, provides its traders with a more realistic assessment as to the chance of longshots and the true probabilities of runners in a horse race- the favourite longshot bias is typically diminished, if not eroded).

Second, there is a strong case to be made that the incorporation of Timeform experts into Betfair&#8217-s horse racing radio service, has merely served to undermine the exclusiveness of the Timeform brand. Indeed, in situations where the Timeform expert&#8217-s selection fails to win, the brand is exposed to ridicule.

It is debatable whether the rather highbrow and serious research provided by Timeform, has any strategic fit with the Betfair trading culture. And one is therefore left to conclude that Betfair has not only misjudged the market for Timeform products, but also, demonstrated a serious lack of awareness of its own customers.

The hard truth of a failed plan is that the core values of the Timeform brand have been diluted through its association with a commercial betting exchange.

Hummm&#8230- I won&#8217-t make any comment on TimeForm (which I&#8217-m not familiar with). However, I will say this, generally speaking.

1. A betting exchange has no business being a content provider.
2. Except if the betting exchange can and will develop some very special content that the traditional media can&#8217-t or won&#8217-t provide, and that is of high strategic interest.
3. The difficulty, though, is that exchange executives and managers don&#8217-t have the first clue about how to set up and run a credible and popular media.
4. That said, it could well be that some exchange-sponsored or -run media projects will succeed &#8212-due to some highly talented project managers (the exception, not the norm).

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