Telstra wants out of the Trading Post

Print can't compete with online ad sites
The Age online
James Kirby
June 17, 2007

Three years after Telstra paid a pricey $636 million for the publication, it has put the business back on the block and it will be lucky to cover its costs.

At first glance, it's another flop from Telstra (in this case its directory business, Sensis) but who could have known three years ago that the internet would not just threaten print media in the "non-journalism" categories but beat it out the door.

In the world of job ads, real estate ads, exchange and mart classifieds, such as those in The Trading Post, a whole generation has popped up that would not dream of waiting for a weekly magazine.

They move instantly — and they move online. Telstra's shift into "media without journalists" — as the purchase of The Trading Post was considered in 2004 — was much riskier than buying, say, the Packer group's magazine stable.

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.

The 7 per cent drop in interim revenues at The Trading Post in the six months to December is inexcusable. No wonder Telstra CEO Sol Trujillo pulled the trigger. He is much more excited by new media ventures such as SouFun.com, the real-estate website Telstra owns in China that is everything The Trading Post is not — new, exclusively online, low-cost and free of baggage.

The sale of the Packer group's Australian media interests is a sign that shifting traditional media assets into an online environment quickly is too hard. However, Packer's buyers, private equity group CVC, clearly have no fear.

Telstra might not look too clever when it sells The Trading Post. But at least Telstra knows what it doesn't know.