Sensis to Sell Back Trading Post?

The Kelsey Group’s blog reports on a possible sale by Sensis of their Trading Post classified property.

After being one of the first directory companies to enter the classified market, Telstra’s Sensis has placed its Trading Post property for sale. According to a report in The Age, “Sensis paid $636 million for the fading publication three years ago, but after continuous revenue declines and senior executive departures, The Trading Post is back on the block for a price believed to be no higher than the telco paid in March 2004.”

The motivation to sell the property seems to have come after the departure of John King, who appeared to be the last major supporter of the venture. This is startling news given Sensis’ much touted strategy of bringing together businesses and consumers in an open trading environment. Sensis has had the golden touch with most of its ventures, so the failure of The Trading Post seems at odd with the company’s goal of being the local media of choice in Australia.

The The Age article adds:

It it is clear that revenue from the publication has been declining, despite growing revenue in the wider $10 billion Sensis empire. Sensis said revenues at The Trading Post were down 7 per cent in the six months to December. The sale of The Trading Post will be the latest in a long line of unsuccessful attempts by Telstra to diversify, including a number of dot-com ventures and troubled joint ventures in Asia. (…) Sources close to the company said attempts to centralise management functions at the previously independent publication had backfired. Broking analysts believe the group did not have the management skills to shift customers online from the weekly print publication.

James Kirby, editor of Eureka Report, adds in an editorial: ” With the planned sale of The Trading Post, Telstra is acknowledging it does not have the expertise in traditional media to recreate the publication as a successful print/online hybrid, which it must become to survive.”

What it means: in a really surprising move, Sensis seems to be interested in selling back their classified division they bought just a few years ago from Trader Corp. It’s a move I don’t understand. Did they paint themselves in a corner by promising to double revenues by 2010, a tall order indeed? In any case, in a world where the winner will be the
one who controls the data
, this is, IMHO, not necessarily a good move by Sensis.

YP Corp. to Acquire Livedeal Inc. for $12M

My friend Mat just sent me this news regarding the acquisition of LiveDeal.com by YP Corp., the owner of YP.com.

Under the terms of the acquisition, LiveDeal shareholders received 15,968,514 shares of YP common stock. LiveDeal will remain an independent entity and a wholly owned subsidiary of YP and the two companies will leverage one anothers content, sales teams and technology to strengthen their individual product offerings. YP plans to use LiveDeals innovative technology platform to converge its four principal marketing channels directories, mobile services, classifieds and advertising/distribution networks into a first-of-itskind, hyper-local marketing solution for businesses and consumers.

After listening to the analyst call, here are additional nuggets of information:

  • They want to become “eBay without the auction”
  • They claim they will be the “first player to fuse classifieds and YP online” (which is not true as most international directory players, like Yellow Pages Group, who have acquired classifieds companies in the past have integrated both together already)
  • Livedeal Inc.’s revenues have grown 300% in the last two years and will reach $5M this year. Breakeven will also be attained this year and current burn rate is $100K per month. Its gross margin is 85%.
  • Livedeal currently has 1M unique visitors
  • Livedeal.com’s will become YP.com’s technology platform.
  • Investors in LiveDeal Inc. will now own 11.5% of YP Corp.
  • LiveDeal’s business model: running newspaper publishers’ classifieds and directory section and sharing revenues with them. The Philadelphia Enquirer, The Toronto Star and Montreal’s La Presse are all customers.

What it means: like my friend Greg, that’s certainly a deal I was not expecting. I’ve said for a few years that directory and classifieds are a natural fit together and I think that acquisition signals more consolidation in the marketplace. For example, Oodle is likely to be acquired by a newspaper publisher this year. As for YP Corp, it looks like they are morphing into a platform play. Hopefully, their past legal troubles won’t impair their ability to sell to large media companies.

First Quarter Newspaper Online Ad Revenues Up 22.3%

(via the Center for media research)

According to preliminary estimates from the Newspaper Association of America, advertising expenditures for newspaper Web sites increased by 22.3 percent to $750 million in the first quarter versus the same period a year ago. Advertising on newspaper Web sites made up 7.1 percent of total newspaper ad spending in the first quarter compared with 5.5 percent for the same period a year ago. (…) Advertising expenditures at newspapers and their Web sites totaled $10.6 billion for the first quarter of 2007, a 4.8 percent decrease from the same period a year earlier. Spending for print ads in newspapers totaled $9.8 billion, down 6.4 percent versus the same period a year earlier.

Of note in the first quarter of 2007, classified advertising fell 13.2 percent to $3.4 billion with the following detailed information:

  • Real estate advertising fell 14.2 percent to $953 million
  • Recruitment dropped 14.3 percent to $975.3 million
  • Automotive was down 20.1 percent to $751.3 million
  • All other classifieds were down 0.5 percent to $699.3 million

What it means: clearly, growth in online advertising revenues at newspapers does not compensate for loss of print revenues. Especially important are drop in automotive, real estate and recruitment (three verticals that are really strong online). What’s most important at this point is making sure newspapers increase the traffic to their web properties by all means (distribution agreements, search engine optimization, launch of new verticals and hyperlocal sites, etc.).
The creation of forced Print/Online bundles might also help them sustain their total revenues while online monetization improves in the future.

EADP Conference: Eniro and User-Generated Content

Barcelona Arts Hotel

At the EADP conference last week, I had the chance to listen to a great presentation by my friend Christer Pettersson from Eniro, the Nordic Countries directory publisher. Their online strategy has always been very progressive but this presentation has convinced me that they are amongst the most innovative directory publishers worldwide.

Here are the highlights:

  • They’ve introduced moderated reviews and ratings within their directory site a year ago with great success. They want this database to become a new competitive advantage that cannot be easily replicated by competition. They offer an opt out for merchants who don’t want it but very few have done it. Some advertisers even include their review scores within their print ad! Users love it.
  • They now offer free user-generated classifieds
  • Eniro acquired 50% of Bubblare.se, the Swedish YouTube. They’re placing a bet on the explosion of online video advertising and want users and advertisers to upload videos.
  • They want to encourage tagging
  • They want people to upload pictures and are introducing picture navigation
  • They want users to update/improve their residential listings
  • They’ve launched a corporate blog

Update: just before publishing this post, I received news that Eniro had acquired Krak.dk for 400M DKK ($72M). According to what I’m reading (my Danish is quite poor…), Krak.dk is one of the leading local search and mapping site in Denmark.

What it means: Eniro has clearly decided they would experiment with all sorts of Web 2.0 applications and features within their network of sites. Kudos!

Facebook May Launch Local Classifieds

Found on Mashable this morning:

Facebook is considering the launch of a local classifieds service, a source told Mashable. Under the proposed system, it would be free to list items in your own network, and cost a few dollars to post to each additional network. (…)

Facebook reportedly has low clickthroughs on ads, so it’s hardly surprising that they’d look to launch a classifieds service which will no doubt be popular with poor students. But it seems odd that they’d make it free: why not charge $1/posting, thus keeping out spam and guaranteeing a nice revenue stream? (…)

What it means: large social networks have reached critical mass and will be looking at additional revenue sources to improve their top and bottom-line. Classifieds are a natural extension as it’s one of the best way to monetize C2C (consumer-to-consumer) relationships.

Google has Launched Pay-Per-Call in India

I found a nice nugget of information in this Business Week article about pay-per-call:

“Google is currently at work on its own pay-per-call service, which already works as a part of Google Maps but hasn’t yet been offered to U.S. small businesses. In that system, users click on an icon for a restaurant, enter their numbers, and an outside provider connects the user and the establishment. The company has already launched a formal pay-per-call product in India, says Rohit Dahawan, a product manager for Google that oversees the click-to-call and pay-per-call products. And they’re working on more such products, to be launched in the next several months in the U.S. They’ve also started tracking calls as part of their updated small-business AdWords service.”

Digging a bit deeper, I found (via Search Engine Roundtable) this September 2006 DigitalPoint forum thread that talks about it:

“These ads are charged at about 45 INR (Indian Rupees) (about $1.00). When somebody clicks on the ad, you get a text box where you can input your number, the moment you submit google connects a call between you and the advertiser and let both of them speak for as much time as they want. So advertiser only spends about 45 INR, irrespective of the calling time. One can call you from any part of the world and these charges will remain same. Also if the call get disconnected in first 10 seconds, the advertiser pays nothing. This service is currently in beta and currently google seem to have offered access to pay per call to some big players in the indian .com industry.”

What it means: I was not aware of this Google pay-per-call trial. They are clearly using the click-to-call functionality they deployed earlier in 2006 to enable the pay-per-call model. I really believe in this call-based ad model (it was part of my 2007 predictions) but I’m not sure this is the right way to execute. Click-to-call is not as seamless as replacing a merchant’s usual number with a trackable phone number. But you know what? If Google is trialling pay-per-call, you’d better be thinking about it as well if your media is all about calls. BTW, I also love the idea of expiring phone numbers for the classifieds business (like Craigsnumber).

Google has Launched Pay-Per-Call in India

I found a nice nugget of information in this Business Week article about pay-per-call:

“Google is currently at work on its own pay-per-call service, which already works as a part of Google Maps but hasn’t yet been offered to U.S. small businesses. In that system, users click on an icon for a restaurant, enter their numbers, and an outside provider connects the user and the establishment. The company has already launched a formal pay-per-call product in India, says Rohit Dahawan, a product manager for Google that oversees the click-to-call and pay-per-call products. And they’re working on more such products, to be launched in the next several months in the U.S. They’ve also started tracking calls as part of their updated small-business AdWords service.”

Digging a bit deeper, I found (via Search Engine Roundtable) this September 2006 DigitalPoint forum thread that talks about it:

“These ads are charged at about 45 INR (Indian Rupees) (about $1.00). When somebody clicks on the ad, you get a text box where you can input your number, the moment you submit google connects a call between you and the advertiser and let both of them speak for as much time as they want. So advertiser only spends about 45 INR, irrespective of the calling time. One can call you from any part of the world and these charges will remain same. Also if the call get disconnected in first 10 seconds, the advertiser pays nothing. This service is currently in beta and currently google seem to have offered access to pay per call to some big players in the indian .com industry.”

What it means: I was not aware of this Google pay-per-call trial. They are clearly using the click-to-call functionality they deployed earlier in 2006 to enable the pay-per-call model. I really believe in this call-based ad model (it was part of my 2007 predictions) but I’m not sure this is the right way to execute. Click-to-call is not as seamless as replacing a merchant’s usual number with a trackable phone number. But you know what? If Google is trialling pay-per-call, you’d better be thinking about it as well if your media is all about calls. BTW, I also love the idea of expiring phone numbers for the classifieds business (like Craigsnumber).

Local TV Online Revenues Up 41%

A new survey by the Television Bureau of Advertising reveals interesting elements about local TV online revenues.

Highlights:

  • Local television’s online advertising revenues were up 41% in 2006 to $399 million (2007: $618 million).
  • Many stations are using the Web as a publishing platform by also offering classified and directory advertising.
  • Seven categories comprised half of all online ad spending (in particular, Real Estate, Health, High-Tech and Automotive).
  • TV station share of the local online ad market was 7% in 2006, up from 6% (+17%) in 2005 and 4% (+75%) in 2004.
  • Local newspaper and radio websites share of local ad revenue declined in 2006. Newspaper sites went from 43% in 2005 to 36% in 2006 (-16%). Radio websites went from 4% of local ad spend in 2005 to 2% in 2006 (-50%).
  • A key driver of growth was video advertising. In 2006, 72% of TV station websites sold video ads, and 80% plan to in 2007.

The report recommends that local broadcasters:

  • rethink the mass-media mentality with an eye toward viewing the Internet as a mass of niches
  • hire a dedicated online sales force
  • give strong consideration to launching a real estate section
  • consider spin-off sites that may not be branded to the station (new verticals)

You can read the 31-page .pdf report here.

(via Broadcasting & Cable and the Television Bureau web site)

What it means: online revenues are starting to be more substantial in local TV but they are still much smaller than what you find in local directories or newspapers. I wonder if it wouldn’t be more efficient for local TV to partner with local radio, newspapers and/or directories to leverage each other’s strengths instead of competing. The critical mass of multimedia content attached to a mashed-up TV/Radio/Newspaper/Directory site might make this a very interesting destination in a hyperlocal context.

NY Times Publisher: “I Really Don’t Know Whether We’ll Be Printing The Times In Five Years”

Found in today’s Haaretz (via TechMeme) an interview with Arthur Sulzberger, owner, chairman and publisher of the New York Times company. In this interview, he gives readers honest answers to tough questions. Here are the highlights:

  • Given the constant erosion of the printed press, do you see the New York Times still being printed in five years?

“I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care, either,” he says. He’s looking at how best to manage the transition from print to Internet. “Internet is a wonderful place to be and we’re leading there,” he adds. The Times has doubled its online readership, and now has 1.1 million subscribing to the print edition – and 1.5 million readers online, each day.

  • Asked if local papers have a future, Sulzberger points out that the New York Times is not a local paper, but rather a national one based in New York that enjoys more readers from outside, than within, the city.
  • Classifieds have long been a major source of income to the press, but the business is moving to the Internet.

Sulzberger agrees, but what papers lose, Web sites gain. Media groups can develop their online advertising business, he explains. Also, because Internet advertising doesn’t involve paper, ink and distribution, companies can earn the same amount of money even if it receives less advertising revenue.

  • The New York Times recently merged its print and online news desks. Did it go smoothly, or were there ruffled feathers? Which team is leading the way today?

“You know what a newspaper’s news desk is like? It’s like the emergency room at a hospital, or an office in the military. Both organizations are very goal-oriented, and both are very hard to change,” Sulzberger says. Once change begins, it happens quickly, so the transition was difficult, he says. “But once the journalists grasped the concept, they flipped and embraced it, and supported the move.”

  • How are you preparing for changes to the paper that are dictated by the Internet?

“We live in the Internet world. We have, for example, five people working in a special development unit whose only job is to initiate and develop things related to the electronic world – Internet, cellular, whatever comes. The average age of readers of the New York Times print edition is 42, Sulzberger says, and that hasn’t changed in 10 years. The average age of readers of its Internet edition is 37, which shows that the group is also managing to recruit young readers for both the printed version and Web site.

  • In the age of bloggers, what is the future of online newspapers and the profession in general?

There are millions of bloggers out there, and if the Times forgets who and what they are, it will lose the war, and rightly so, according to Sulzberger. “We are curators, curators of news. People don’t click onto the New York Times to read blogs. They want reliable news that they can trust,” he says. “We aren’t ignoring what’s happening. We understand that the newspaper is not the focal point of city life as it was 10 years ago. “Once upon a time, people had to read the paper to find out what was going on in theater. Today there are hundreds of forums and sites with that information,” he says. “But the paper can integrate material from bloggers and external writers. We need to be part of that community and to have dialogue with the online world.”

What it means: I think it’s the first time I read an interview with a print media executive that clearly states that their goal is to manage the transition from print to online. I believe it’s a very candid view at what’s happening behind the scenes in the New York Times Company boardroom and possibly at all newspapers around the world. I also like the concept of the New York Times, as a trusted brand, being the curator of news, i.e. an aggregator of trusted news sources (including blogs). Finally, the NY Times chairman seems to embrace the fact that the New York Times is an authoritative international newspaper brand.