Telstra Seeks Exit From Online Ads

It wasn't that long ago when the phone book ruled the search business.

And even more recently many telcos thought they saw an online future in their directories.

One of these was Australian telecom giant Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), which was so ambitious that it rolled up other classified ad firms into its Sensis directories unit. At its peak a decade ago Sensis was worth 15 billion Australian dollars (US$11.7 billion).

Now, Telstra is negotiating to sell off the last piece of the business, the Sydney Morning Herald has reported. It offloaded 70% of Sensis last year for A$454 million (£354 million).

The remaining business, classified ads site Trading Post, may fetch as little as A$10 million ($7.8 million). Telstra bought the title for A$636 million ($495 million) in 2004.

For more fixed broadband market coverage and insights, check out our dedicated broadband content channel here on Light Reading.

The reason for the 95% collapse in value is no mystery, of course: Google, eBay, Craigslist, Facebook and the dozens of other ways humans now have of connecting with what they need. Telstra's tale is a reminder of how much value the old directories monopolies have lost.

But it hasn't all been downside for the Australian telco. At around the same time it was tipping cash into domestic ad companies, Telstra was also picking up some Chinese consumer websites. (See Telstra Cuts Chinese Firms.)

It sold out of one of them, real estate website Soufun, in 2010 for a handy $190 million profit -- a 70% gain.

And its purchase of 71% of Autohome for A$200 million ($156 million) became a windfall when the auto site debuted 14 months ago. It is now worth $3.9 billion.

— Robert Clark, contributing editor, special to Light Reading

Mitch Wagner 2/3/2015 | 10:41:04 AM
Re: Not a bright future There are still a lot of people not on the Internet. But they're a dwindling population, and I question how much money they have to spend. 
R Clark 2/2/2015 | 9:38:58 PM
Re: Not a bright future I think the main reason telcos are maintaining their directories is regulatory.

But it's also kind of interesting that some people still see a business in directories advertising.
Mitch Wagner 2/2/2015 | 7:26:22 PM
Not a bright future It's difficult to see any kind of future for the venerable phone book business. Maybe a directory that doesn't just provide ads and listings, but also enables transactions, connecting buyers with sellers?

Phone books were the 19th and 20th century versions of social networks.
Sign In