Trading Post closes down print versions! Ron Walker saves Fairfax?

When Telstra paid AUD $636 million for he Trading Post in 2004 many questioned yet another wasted acquisition for the Telco giant (the list is long). Today those questions have been vindicated as Telstra has now shut down the 22 print versions of the Trading Post to concentrate on the online edition. Another hit will come as many visitors to the website would have come from the print versions and the final blow maybe the poor structure of the Trading Post website – as only last year I attempted unsuccessfully to post a product (a free trial offer – that wasn’t actually free) and gave up after I could not work out how to post (it kept directing me to pay).  So I missed out on saying the phrase ‘tell him he’s dreaming’ all because a special offer I clicked on didn’t turn out out be that special after all.

As for another ‘dreamer’ Ron Walker is trying to paint his tenure at Fairfax as a savior telling ABC PM, “If we had continued to rely on the cash flows from the Sydney Morning Herald, the Age and the Financial Review, the company wouldn’t have existed today, so, it’s paid off for us”. Yes Ron, paying $700 plus million for a ‘New Zealand only’ classifieds site saved Fairfax! Fairfax has some great opportunities but the window is closing very fast and buying up expensive digital assets that do not even cover the interest on the loan to buy that same asset is not the answer. I have no idea what Ron Walker has done in his time on the Fairfax board, but I can assure you he will not be remembered as a savior!

It truly dumbfounds me how large organisations such as Telstra, Fairfax, PBL or News Limited rarely ever create a unique product from scratch. They are all very good at buying assets at the height of the market and selling or getting out at the bottom of the market. These companies already have huge traffic to their major sites and massive databases in the classifieds arena, be it in cars, jobs, houses or general classifieds., so it should be relatively easy for them to create successful new products and increase shareholder value.

They need to get out of the habit of buying up websites for 100’s of millions of dollars and invest a few million each year in a ‘Black Ops’ style tech team to come up with new and exciting products from existing databases/systems they have.

This team should be able to tap into (read) any database and should be able to create new products from scratch without someone telling them ‘no you cannot do that, this will affect this or that’. The idea is that you create new products and test them in markets across your digital assets. This team should be able to go and meet with any division of the organisation and be granted access to any data. Yes, you must have some oversight, but that is at the end of the process, not at the beginning – if a product doesn’t fit – or is too risky – it gets shelved.

The alternative is to continue dying a slow death and live in denial. There does come a time when banks will abandon these companies or their money will run  out and for some of them the only way to survive will be to do what Telstra is doing and selling off or closing down assets.

This is the digital era and web/mobile based products will be everything to these companies in less than 10 years.

ABC, Fairfax, News Ltd, PBL, Ron Walker, Telstra, Trading Post

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About Peter J Ricci

Peter Ricci is the Director of Agentpoint.com.au, Business2.com.au, Ginga.com.au and ZooProperty.com and has been involved in designing and developing real estate systems and websites since 1997. In July 2001 Peter founded Business2.com.au to help real estate agents better understand the power of the Internet and the real estate landscape in Australia and New Zealand. Since then he has penned over 300 articles on a variety of subjects in the real estate technology industry. Business2.com.au is now the leading real estate technology site in Australasia.

27 Responses to Trading Post closes down print versions! Ron Walker saves Fairfax?

  1. Haddoo September 30, 2009 at 11:17 pm #

    Big news! Interesting article! Thanks! It’s hard for these ‘giants’ to act quickly and wisely and to see what’s happening on the ground beneath them.

  2. Craig September 30, 2009 at 11:50 pm #

    Sensis is a company that’s online properties are crippled by it offline dead tree properties. They won’t create a great online product if it will take business from their cash cow offline business. Yellow Pages is another example of this, it is a rubbish web site all because making it great would distract from ‘The Book’. Trading Post now that it is unshackled from the paper, and with such a strong brand, could potentially be great, but I won’t be holding my breath. Sensis is yet to come up with a great online product.

  3. Peter D'Arcy October 1, 2009 at 6:47 am #

    Hi Peter – Great article on how narrow minded accountants in this country are killing off our great companies. Many of these companies were created and flourished on the back of great old fashion Aussie innovation. Today it is all about repackaging the product – change of wrapping paper – generally all glossy & shiny with pretty colors and lovely ribbons & bows – then re pitching them to the market with a truck load of spin and marketing hype all aimed at hood winking the public – The great Myer Department Store is an great example.

    I congratulate you on promoting the “innovation moment”. Google is doing a wonderful job as a shining example of innovation, value and customer focused which is in direct contrast to the stogy stuffy accountant lead Microsoft who are devoid of any modicum of innovation, sense of value and customer focus.

    Good on you as we need people like you to promote the need for in innovation and creativity as success in the next decade who belong to the innovators.

  4. Nick October 1, 2009 at 7:36 am #

    They wouldn’t be buying companies if they were competent at making new ones. 😛

    I dont think print is dead. Instead it should complement the web.
    By throwing away the Trading Post, they are demonstrating that they don’t understand that at all.

  5. Glenn Rogers October 1, 2009 at 7:57 am #

    Fairfax needs a big shake up urgently.
    They need someone with vision and the ability to act quickly.

    Fairfax are so steeped in their own counter productive culture they are in real danger of collapsing.

    How can it be that print still competes with on line in there ? It’s all the one company isn’t it ?

    One example – they still call the commercial section of real estate in the AGE “commercial property” more than 3 years after acquiring http://www.commercialrealestate.com.au

    Wouldn’t you think they would rename the print section Commercialrealestate.com.au to drive traffic back to the web site and use the web site to sell into the newspaper ???????????

    The culture need to change in there, I’ve bought shares in them recently punting on that happening, I cant imagine they will let it go down without a fight.

    At present somethings wrong, I believe there are elements at Fairfax that just don’t get it and won’t be advised.

    Sam Plowman left after only 12 months……..why ?

  6. Alex October 1, 2009 at 9:34 am #

    RON WALKER SAVES FAIRFAX !
    What a bloody joke.
    First it was the ignorance of Fred Hilmer, then the arrogance of David Kirk, and now the bull dozing Brian McCarthy, all clinging on desperately to the declining revenue that their print empire

  7. Robert Simeon October 1, 2009 at 9:51 am #

    Looks at Rupert’s acquisition of MySpace for $780 million AUD – I wonder what that is worth today $100? Whilst on topic I read this interesting article on http://www.crikey.com.au yesterday by Eric Beecher Crikey publisher and former editor of The Sydney Morning Herald.

    The last time I saw Roger Corbett was five years ago, inside the Fairfax boardroom. I was there because the Fairfax board had asked me to develop my ideas about the company, its newspapers and its future.

    I spent an hour or so presenting my thoughts to the board meeting, starting with what I described as a “Catastrophe Scenario” based on the loss of classified advertising at The Age and The Sydney Morning Herald (which, five years on, has turned out to be sadly accurate) and ending with a range of possible ideas to try to avoid such a scenario (all of which were ignored). My argument was that if the board rated the risk of such a scenario at more than around 15%, it should take swift and decisive action as an insurance policy.

    Throughout most of the hour I talked, Roger Corbett prowled the back of the Fairfax boardroom like a caged tiger, his body language suggesting a disdain for me and for what I was saying.
    After I finished speaking, Corbett moved to the head of the board table. Picking up a copy of one of Fairfax’s hefty Saturday broadsheets from a nearby pile, he told his fellow directors that he didn’t want anyone coming into the Fairfax boardroom again suggesting that people will buy houses or cars or look for jobs without “this”, as he held up the newspaper bulging with classified ads.

    Five years later Roger Corbett is poised to become chairman of Fairfax. If he takes that job — and it is apparently his to take — one assumes it will be because he believes he is the best person to steer Australia’s venerable newspaper publisher through the most challenging period in its history; to create the strategies and culture needed to save it from the fate that threatens the fortunes of most big newspaper companies; to repair the dysfunctionality that has turned the Fairfax board into a laughing stock; to attract smart new media operators into the boardroom; to formulate ways to preserve its important journalism; and to reinvigorate a staff jaded and disillusioned by the Keystone Cops antics of the board.

    Roger Corbett was an outstandingly successful CEO of Woolworths supermarkets. He was reputed to be a retailing maestro and a very tough businessman

    But if he really thinks the great Fairfax editorial and publishing institutions need his leadership now, it suggests the 67-year-old former grocer is someone who, when it comes to media and journalism, doesn’t know what he doesn’t know.

  8. Glenn Rogers October 1, 2009 at 11:43 am #

    I’m hoping they look far and wide and leave Corbett out of it.

  9. Ricky October 2, 2009 at 5:02 pm #

    Robert,

    Great pick up on the Corbett article which has nailed why Fairfax cannot be led by him if they want to progress.

    I have known and seen Roger Corbett in action for almost 25 years and he was a brilliant retailer winning BRW’s ‘Business Plan of the Decade’ for his Project Refresh that put an ocean between Woolworths & Coles in terms of shareprice and profitability for the best part of a decade.

    Having said that Roger’s online knowledge could be written on the back of a postage stamp and it was widely known at Woolworths HQ that he rarely used email preferring to do this through his EA/PA so a techno boffin he aint.

    The Fairfax board presence is all about ego and title for most of these blokes so the head in the sand approach to digital media just proves that just because you are briliant in one industry doesn’t mean you will be brilliant in another. Ron Walker was the same so like replaces like.

    The only reason that REA are No 1. and Domain are No 2. is the fact that the Fairfax board have never encouraged or nutured an online mentality. Those that do come in get either frustrated at the lack of support and leave like Sam Plowman or are trying to build their own standing to go up the Fairfax ranks like Jack Matthews.

    Prior to the News Ltd intervention in removing Simon Baker last year they never really stuck their noses into the print / online links they had under their portfolio. Essentially they gave 5 years of clear air to guys like Baker and Shaun Di Gregorio to flog the virtues of REA to 10,000 agents and guess what happened? Market dominance was achieved and a large gap achieved that Fairfax will never breach.

    Obviously the Google genie is now out of the bottle so that will give REA something to think about but other than Sydney and a small part of Melbourne domain.com.au is just a niche player.

    Not even the existing REA CEO and his imported Sensis mates could screw up that market position in the short run.

  10. Craig Adams October 2, 2009 at 6:18 pm #

    Ricky,

    Agree with you on the Fairfax ‘old school print’ club and the total lack of priority around Digital and the sentiment shown towards print by Corbett, Walker et al.

    Their mentality reminds me of the attitude shown by Charlton Heston when he was addressing the American Gun Lobby of which he was President when he said they can take his gun ‘from his cold dead hands’.

    Maybe they could take the Sydney Morning Herald from Roger and Ron’s hands as the last Mosman paperboy flings a copy over their luxury property fences!

    Fairfax has come to their last fork in the road opportunity to get on their bike and start pedalling on the digital path and the clock is ticking.

    Sort the Board out, get some long term Digital talent in there and say bye bye to the generation fixated with the hum of the printing press.

    Seriously what are Fairfax No 1. in?

    Property…nup less than half the leader who is not exactly the dynamo it once was.
    Jobs…..not even close and dwindling fast thanks to the erosion of the Early General News job placements in the SMH and Age each Saturday.
    Cars…..forget it.

    It could be death by a thousand newspaper cuts! Ugly.

  11. Glenn Rogers October 3, 2009 at 10:13 am #

    They need Simon Baker.

    If they had any vision at all they’d buy his shares from him for a premium, dump the lot and let him take over Fairfax Digital – pay him whatever it takes and if he cant turn it around just give up.

  12. PaulD October 3, 2009 at 10:59 am #

    I doubt whether he would step aboard a sinking ship.

  13. Glenn Rogers October 4, 2009 at 7:07 pm #

    A ship the size of Fairfax would be worth the challenge, but it wont happen.

  14. Sal Espro October 5, 2009 at 3:16 pm #

    So, REA has imported Sensis, have they? Now, that is the joke of how execs and directors get recycled. No wonder they are so bloody arrogant and know-all’ish when you talk to them! How many, including Simon Baker, Glenn R, have ever been involved in the lifeblood of ‘online’, innovation?
    (Don’t know their names do you, Ricky? Sensis’ Trading Post, Just Listed and their other attempts were such screaming successes, weren’t they! So, now they can bring ‘The Word’ to REA – Hah!)

  15. Ricky October 5, 2009 at 5:10 pm #

    All part of the clean out at REA over the past 14 months Sal. The board wanted a change in direction and that is what they got with Mr Ellis at the helm. It’s fairly normal that he was then going to bring in his own people to the replace the ones that either got pushed or jumped.

    It’s not really Greg Ellis fault that he got the REA gig. What’s more interesting is why the REA board went with the company background he had been involved in being the one’s you mentioned in your post.

    As an aside I and many, many others still cannot believe he hasn’t tipped out the most incompetent, untrustworthy and talentless of his current direct reports. Maybe that shows more about his lack of awareness and judgement than anything else.

  16. Greg Vincent October 5, 2009 at 6:45 pm #

    Peter, it’s going to be really interesting to watch how much the traffic plummets for the Trading Post website.

    I can only speculate, but surely the bulk of their website visitors would come as a result of their readers wanting to view more photos about the item they’d read about in the paper, before they would ring the seller.

    The paper is the only thing that they had going for them up against the likes of ebay, carsguide, etc.

    A condensed version of the paper with web ID numbers and/or QR codes that their readers could scan into a mobile phone would have been a better way forward.

    All they’ve done is make businesses & other sellers re-think where they will spend their money & people like my father-in-law who bought the Trading Post religiously every week for years, won’t be bothered going onto the computer, he’ll just learn to live without it.

  17. Robert Simeon October 6, 2009 at 9:00 am #

    Another interesting point(s) is not only are all these businesses under the scrutiny of the general public even more concerni ng is that they all remain under greater scruting of the institutional stock market investors.

    What amazes me is that where ever you look it is blatantly obvious that online is taking over print as the preferred advertising model. It has happened in the motor vehicle, boats and employment categories – so real estate would naturally be the next progresssion. Obviously the Global Financial Crisis expediated consumer sentiment.

    Print simply can’t change however all the online models available and under-construction simply identify how exciting this period of transition holds. Obviously in the real estate industry it has been held up – by the actual real estate agents embracing technology.

    For all the media companies they now can’t simply continue to make glaring mistakes it will be very interesting between now and their next end-of-year financial reports. I expect to see some major changes in Australia’s media landscape over the next twelve months – beware of the institutions with their SELL recommendations.

  18. snoop October 6, 2009 at 11:34 am #

    Walker needs a haircut and a real job.

  19. Rusty October 6, 2009 at 11:56 am #

    Just been playing with the new Radar search on http://www.domain.com.au and I’m really very impressed. Essentially its geo-targeted search around points of interest and weighted preferences. Properties get a star rating depending on how closely they match your needs and the stars even appear on the map view – awesome! Who says FD is not innovative? The whole team behind Domain deserves huge credit for the big strides forward this year. Let’s have less negativity and more recognition for good work.

  20. Ricky October 13, 2009 at 1:20 pm #

    Glad the Fairfax board read this site as they just appointed Roger Corbett to be Chairman. There’s a cultural change move there! Not.

    I can hear all of the Fairfax Digital staff groaning from here. More sharing of the office with the print bods guys, who by the way will be telling you how to suck eggs.

    Another free hit for Google, REA, Seek and anyone else with a quarter decent digital strategy.

    I shake my head!

  21. snoop October 14, 2009 at 11:36 am #

    Yep all makes sense
    A grocer chairing a media company.

  22. Robert Simeon October 14, 2009 at 12:02 pm #

    snoop – what remains to be seen is can the “grocer” get consumers to fill their Faifax shopping trolleys from his shelves. Let’s hope he does not start comparing apples with oranges – because we know what happens next! Corbett is pro-print which is his first mistake!

    Maybe they will start buying petrol stations and bottle shops just like Wollies did?

  23. Ricky October 15, 2009 at 1:02 pm #

    Can someone please explain to me why the REA share price just went bananas. Looks like it went to about $8.69 earlier today. Coming off a low of $2.95 less than 12 months ago I just don’t get it. That makes it a $billion dollar business for the first time as of today.

    Surely the Fairfax hoo ha doesn’t have anything to do with it.

    Peter, Glenn, Robert , anyone?

    Please explain.

  24. Mac October 15, 2009 at 2:06 pm #

    Ricky,

    The ASX in general is pretty speculative at the moment and
    Carsales was recently IPO’ed, valueing it around $1B,
    SEEK a similar story.
    REA is in the same sort of boat.
    The added value comes from old media in the form of Fairfax basically admitting it has no plans.
    Trading Post closes-down print for online (despite that being a dawg too).
    Then grumpy old Rupert rants highlights that his old-fashioned news model can’t go the distancee with Google et al. (And shows he hasn’t got the balls to insert a no Robots tag into his news sites – instead just bags Google ‘cos no doubt his techo’s haven’t let him in on the ‘exclude’ tag knowing he wouldn’t use it anyway).
    However, Ricky, REA isn’t run particularly well, it’s tech is very outdated and it is under threat from http://maps.Google.com/realestate (check this out everyone!). So, while there could be a story to invest in, at $8.69??!!! I’ll try something else!

  25. Ricky October 15, 2009 at 4:35 pm #

    Thanks Mac,

    I guess the online verticals in the areas of real estate and jobs have clear cut leaders with poor competitors who still have a focus on old media as you stated.

    So as a result you invest in the clear cut leader even if they have a crappy back end, poor customer relationships and a less than innovative approach to the future. Agree with you that at $8.69 I’m not jumping in.

    Classic case of the businesses that got their ‘first to market and then dominate the market’ strategy right 5 years ago being almost impossible to move years down the track despite doing very little recently.

    Just needs a ballsy competitor to pop up somewhere and somehow because its all a bit boring.

  26. Kylie Emans October 29, 2009 at 3:02 pm #

    Just goes to show, we can’t rely on these big companies, they have NO IDEA, and us little companies with great online businesses will just have to forge ahead and show them how it is done!

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