Growth

Trading Post takes another hit as Telstra licenses iconic classifieds rag to CarSales.com.au

Engel Schmidl /

The iconic yet troubled classifieds publication the Trading Post has taken another hit, after CarSales announced it would license the brand and website from Telstra following several years of disappointing results – although experts suggest there may still be life in the masthead.

It comes after years of trouble for the 46-year-old publication, during which it has suffered writedowns under the telco giant and a shift to publishing exclusively online that claimed hundreds of jobs.

But CarSales says the partnership works, and that it will be able to bring its own web-based expertise to the classic masthead.

“CarSales as a company has a pretty outstanding record on being able to build brands,” CarSales editor-in-chief Mike Sinclair told SmartCompany this morning.

“We bring that level of expertise because we’re an online business, trading as an online brand. We can bring that quality to the Trading Post.”

Although Telstra has written down the value of the Trading Post since its massive $646 million purchase in 2004, experts say the deal proves the name still carries weight.

“Telstra must think there is some sort of value in this property,” says Telsyte research manager Foad Fadaghi.

“It’s obviously not something they want to put outside of their portfolio, but it does want to hand over the operations to another company.”

Trading Post has suffered a volatile history over the past few years. Telstra axed the print edition of the publication back in 2009. The switch to publishing exclusively online claimed 279 jobs in the process.

Certainly the Trading Post has been a black mark on Telstra’s balance sheet. It spent $646 million on the publication in 2004 but has suffered significant write downs, including one worth $110 million back in 2009.

CarSales.com announced yesterday that it had entered into an agreement where its QuickSales.com.au entity would license the TradingPost.com.au brand and operate the website. The two entities will have “aggregated inventories…providing Trading Post consumers with new ways to buy and sell”.

QuickSales is CarSales’ online auction entity. Sinclair says the two brands are complementary.

“With QuickSales we have the buy it now and auction options, but Trading Post will open us up to the free-to-list classified space as well.”

“From a general classifieds brand it seems like a very good idea. We can open up some pretty exciting changes to the business.”

The partnership is subject to approval from the Australian Competition and Consumer Commission.

A Telstra spokesperson has told The Australian the deal will have an impact on current staff positions, although it needs to await a decision by the ACCC.

Telstra was contacted this morning but wasn’t available prior to publication.

The Trading Post was included under Telstra’s new media division, which handles BigPond and other content deals.

But analysts suggest there must be a gain here, otherwise Telstra would have gone for a full sale.

“There must be some synergy or reason that Telstra wants to keep the brand within its portfolio. It might just sit better as a partnership agreement rather than an outright sell.”

“CarSales does have some great technology so there is a good connection there. But certainly the Trading Post is a publication that has struggled over the years.”

CarSales said in its statement it expects the arrangement will increase earnings per share in the 2013 financial year.

 

 

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