February 21, 2006

Sensis - the push online

21 February 2006 Sensis has been pushed forward as Telstra's opportunity for agressive growth through the exploding "Paid Search" business. Consequently, it is getting the attention of analysts and commentators, like in this Crikey piece. Not surprisingly, some of us suspect that the "Emperor has no clothes". Sensis is at its core a paper directories business (White and Yellow Pages), which has bought more paper assets (the Trading Post) in the hope of turning all of them into a healthy online directories and classified business.

Worldwide, there is some doubt whether traditional publishers such as newspapers can stem the tide of their online equivalents like Google, eBay and Yahoo. In the end, customers will put their money where it works for them. So in the Sensis context, will people pay to advertise on Yellow Pages Online or Google, Trading Post or eBay? The pressure is on Sensis to evolve from a successful monopoly business (Yellow Pages) and to mix it with cashed up, aggressive, innovative competitors like Google and eBay. Watch this space...

Posted by Marius at 08:41 AM | Comments (0)

June 29, 2005

Australian Search Advertising numbers

[29 June 2005] An article in today's Age has market share numbers for Google, Overture and Sensis (they have 60%, 33% and 7% respectively). According to Frost & Sullivan, advertising on search engines is expected to total $130 Million this year. I might be imagining it, but it seems that since Andrew Day, the Sensis CEO, left last year, the heart seems to have gone out of Sensis' online offerings. The latest version of Sensis search seems pretty weak. For example, why does a yellow pages search from the sensis engine give a worse result then one using Yellow Pages directly?

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June 01, 2005

Why would Telstra put its cash-cow on the block?

Sensis logo
We've seen much talk about a potential sell-off by Telstra of its directory business, Sensis. For those not familiar with the Australian scene, Telstra is 50% owned by the Government, which in turn is expected to put that half up for sale in the coming year. These paragraphs in yesterday's Herald-Sun are typical of the media coverage:

"Any spin-offs are a matter for the Telstra board, not the Government alone, and only on a basis that serves the interests of all shareholders. Sensis owns the Yellow Pages, White Pages, CitySearch, The Trading Post classified advertising newspaper and other directories."

"It is the jewel in the Telstra crown because its revenue is growing at double the rate of the telecommunications business. It should report revenue this financial year of about $1.5 billion and earnings before interest, tax and depreciation of $800 million to $850 million".

Sensis is a virtual monopoly business and its profits show that. Telstra has protected its white and yellow pages business with vigor. Its recent management correctly saw the threat posed by search engine marketing like Google's AdWords. They focused on innovating, acquiring classified media assets and creating online advertising offerings such as BidSmart. Google's stunning financial performance shows that the world thinks Search Engine marketing is effective.

To what extent will Google have an impact on a local directory businesses like Sensis? Will the Sensis Yellow Pages Maps have Google Map competition in Australia at some stage soon? Will Sensis remain just as profitable if it loses online? Some in Telstra might be thinking that Sensis is at the peak of its profitability.

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