Yahoo!7, the joint venture between Yahoo! and Channel Seven, has made its first acquisition, buying online travel information company Totaltravel.com for $20 million last Friday.
Yahoo!7 will merge the site with its own travel website and use Totaltravel.com's large audience and subscriber base to promote Channel Seven shows including The Great Outdoors, chief executive Rohan Lund told SmartCompany.
"We'll run the site as it is today for another six months at least and then we'll migrate it to a revamped site with all our content," Lund says.
"Total travel has done a great job of collecting the audience and the data... we have the programs and the technology to take it to the next level."
"We're incredibly excited about the travel category and we know Australians are particularly interested in travel," Lund says. "Travel represents a large proportion of the online advertising market."
Totaltravel.com, founded in 1999, attracts about 1.2 million unique browsers a month and has 500,000 subscribers to its email marketing list. It is the second largest online information site behind Wotif.com.
Industry sources estimated Totaltravel turned over about $10 million a year with earnings of $3 million.
But Lund says the site's information database was an equally significant draw card.
"Totaltravel.com.au contains 167,000 listings to restaurants, shops and tourist attractions."
"There are 293,000 listing in the UK, and these combined listings dwarf anything else that is available."
Companies pay to list on the site, but unlike rival travel websites it does not charge companies a commission for sales they generate through the site.
But Lund says the acquisition is the first of many. "We've been actively looking at acquisitions over the past six months. This is the first one we've completed, but there will be others."
Yahoo!7 is "focused on verticals" and "only really interested in leadership positions," he says.
Yahoo bought Totaltravel.com from 12 owners, including founders Robert Baker Esther Pearson and Paul Fisher. Other shareholders included former publishing and broadcasting chief exec Peter Yates, and former Fairfax media and ninemsn executive Martin Hoffman.
Lund says he is confident the site will quickly overtake Wotif.com to become Australia's largest online travel site.
"It's a great time to invest and we're confident that following the acquisition we will quickly move to the number one audience position in the online travel sites in Australia."
But Wotif.com CEO and managing director Robbie Cooke says the acquisition "won't bring anything particularly different" to Totaltravel.com.
"We did a joint venture with ninemsn in 2006 that lasted for about 12 months and we didn't see much traction from that," he says. "This acquisition doesn't particularly change the playing field from our point of view... it won't change our strategy at all."
Totaltravel.com Director and CEO Malcolm Baker says the deal demonstrates the confidence Yahoo! and Seven have in the local internet industry. The Australian domestic travel market was valued at nearly $65 billion last year, he says.
