news Publishing giant News Ltd has revealed plans to sell its online search and directories business TrueLocal to Telstra’s Sensis division, subject to approval from the competition regulator.
Sensis managing director, John Allan, said the acquisition would add value to customers of Sensis’ Yellow Pages network. “TrueLocal has built a strong reputation in connecting consumers with businesses across the country, through its high quality local business listings,” he said. “TrueLocal also has an extensive library of ratings and reviews which enables consumers to make more informed decisions when they search for a local business.”
“Consumers’ reliance on this type of content underlines why it’s important to make it accessible – which drives more traffic to the Yellow Pages network and generates better leads for our customers.”
News Limited’s chief financial officer Stephen Rue added that TrueLocal was “a terrific business”, but the reality was that it was no longer a priority for News Ltd due to the company’s recent investments in Foxtel, Fox Sports and the Business Spectator group of publications. “So, while we are sorry to see TrueLocal go, we recognise that Sensis is now the best home for it. John Allan knows the business better than anyone and we wish him and everyone at TrueLocal all the very best,” added Rue.
If the ACCC approves the acquisition, TrueLocal will continue to operate in its current form whereby users can access local search information, reviews and other services. TrueLocal general manager Simon Carson and his management team will continue to lead the business.
The news comes as Sensis continues to sink downwards on Telstra’s revenue chart. For the 2012 financial year the division’s revenue was down 17.7 percent on the previous year, reaching $1.5 billion, with most of that slump being a 22.1 percent slump in the division’s print revenue (to $1 billion). The company’s digital revenue was up, however, to $400 million.
There isn’t a huge lot of evidence that TrueLocal was doing that well for News Limited – and if it was doing well, then I doubt the Murdoch empire would have been interested in selling it. No doubt Telstra thinks – and this is the attitude with pretty much everything Telstra does – that it can do a better job with TrueLocal than News Ltd can, by integrating it into its other properties. I’m not sure to what extent that’s possible, due to the fact that Telstra’s digital assets tend to be too complex and messy to really perform at the level I think Telstra would like to see them perform at. There’s nothing ‘simple’ about the Sensis business, and I don’t think it will be easy for Telstra to wring more value out of TrueLocal.
However, the simple fact is that with Sensis’ print revenues collapsing to the tune of 22 percent in a single year, the telco needs to do something to try and grow its digital business. Telstra’s real competitor with its Yellow and White Pages businesses is Google, and buying TrueLocal, with its search engine and directories business, would look like a decent way to attack Google for a company like Telstra. Of course it will work to a certain extent due to Telstra’s sheer size … but personally I am unsure if TrueLocal is the sort of brand which will still be around in 5-10 years. I suspect it will not.