Telstra Cuts Chinese FirmsTelstra Cuts Chinese Firms

MELBOURNE -- Telstra today acquired 55 per cent of two Chinese internet businesses with leading positions in the fast-growing online auto and digital device advertising sectors.

Telstra acquired the controlling stakes in the two businesses, Norstar Media and Autohome/PCPop, for an undisclosed amount. Both businesses are cash-flow positive.

Norstar, founded by Chairman Mr Lan Jiang, operates the popular auto site Che168.com and leading digital device site IT168.com. Autohome/PCPop, founded by successful young Chinese entrepreneur Mr Li Xiang, operates the leading auto site Autohome.com.cn and popular digital device site PCPop.com.

Combined with the 2006 acquisition of a 51 per cent stake in China's number one real estate site, SouFun, the majority stakes in the auto and digital device sites give Telstra a strong strategic position in the internet advertising market of the world's most populous nation. Together, the sites deliver the second largest user traffic in the digital device segment and the largest user traffic in the specialist auto segment, complementing SouFun's leading position in real estate.

Telstra CEO Sol Trujillo said the acquisitions were consistent with Telstra's strategy of creating a media-comms footprint in Australia and internationally.

"Telstra now owns majority interests in three of the leading Chinese companies operating in the three key online advertising industry segments: real estate, auto and digital devices," Mr Trujillo said.

"Combined with our majority stake in China's number-one real estate website, SouFun.com, these acquisitions provide further high-growth opportunities for our buy, find and sell business, Sensis."

While the price paid by Telstra was not disclosed, Mr Trujillo said the acquisitions cost "less than half what we paid for 51 per cent of SouFun in 2006".

Telstra Corp. Ltd. (ASX: TLS; NZK: TLS)