Anthony Hilton: Betfair triumphs in the PR stakes

Betfair, the betting exchange and one of the most successful new businesses to emerge from the internet in the UK in the past ten years, has begun a publicity campaign leading to an eventual flotation on the stock exchange.

Anthony Hilton
Anthony Hilton

The PR campaign, though thus far just in embryo, is seeking to establish that the business is worth about £1.5bn. The articles that criticise Betfair - and these have been substantially outnumbered by those giving positive coverage - do so on the basis that the value is too high. There is concern that confidence among investors in IPOs is already fragile, without risking another offer where an intrinsically good business is overhyped, overpriced and as a result fails to meet expectations. This camp considers a value of £1.2bn is more realistic.

Significantly, however, no-one has sought to challenge the Betfair business model and this, rather than the spats about the value, is the real PR triumph because it is so different.

The firm sought to use the internet to disintermediate the bookmaker. In financial markets buyers and sellers trade shares with each other through the electronic stock exchange. The founders basically applied the principle of financial market trading to the betting market.

It provided a marketplace without the need for a market maker. Today, people wanting to bet on the result of a football match can do so with each other on Betfair's platform.

What makes Betfair unique is that its founders realised that those threatened by this revolutionary business were liable to retaliate and get the Government to ban it, under the pretext of protecting government tax revenues.

So when it was founded ten years ago, one of the first people though the door, Mark Davies, was brought in specifically to handle PR and to make sure the Government and the media understood right from the beginning what it was about.

For foresight alone, Betfair deserves to succeed.

Anthony Hilton is City commentator on London's Evening Standard

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