So, News Corp. and Sensis (Yellow Pages – Telstra) are to duke it out for directory business in Australia. These business partners (in Foxtel pay TV) are going head to head according to reports out this morning. Both rely heavily on their print businesses for revenue. Their customers are more wedded to their print product and, at the moment, so are consumers. But that will change. By taking on Sensis, News is speeding up the migration of directory related business online.
The not unexpected move by News demonstrates that News sees an end to classified revenue from newspapers. It also presents a face of competition while maintaining the status quo on advertising costs. I do not expect News to aggressively pursue Sensis on advertising rates and doing so would not make sense. News wants premium advertising rates as much as Sensis. Only an outsider could upset the directory and online classified business. Remember air travel up until the arrival of Virgin Blue. Despite all the bluster about competition, in terms of ticket prices travelers did not see it. I’d suggest the same will be true here with News and Sensis and directory business. Neither company has the slim operating costs necessary to genuinely bring the cost of directory and classified advertising down significantly.
More generally on the move, News is doing here in Australia what it has been doing globally for the last year – making sure its brand has the necessary presence and access points in the mobile online world.
Reports about the move: The Australian (A News Corp. newspaper)