I still have no idea why realestate.com.au, which is majority owned by News Corp, got rid of Simon Baker, who talks to SmartCompany today in our weekly entrepreneur interview.
The guy is smart, entrepreneurial and an expert in growing online businesses. Exactly the type of person News Corp would love to have around, you would think.
Not that Baker is spending any time looking back. As he explains today, he’s currently got investments in 14 businesses and we’re willing to bet that at least a few of them are going to make him very, very wealthy.
One of the questions we asked Simon was how the online classifieds sector had held up during the GFC. His answer: “I’d rather be online classifieds than traditional classifieds.”
That point was underlined today with the release of CarSales half-yearly profit result, the company’s first since listing in the second half of 2009.
Revenue was up 26% to $56.1 million, EBITDA margins increased from 44% to 51% and net profit up 51% to $19.1 million – a cracking result first up.
Even better, the company now expects to beat its 2009-10 prospectus EBITDA forecast of $56.6 million by about 8%, based on the strong current market conditions.
That’s the sort of classified advertising growth that Fairfax and News would kill for right now.
Of course, while this result is the company’s first as a listed entity, it has been a long time in the making.
CarSales, like realestate.com.au and Seek, pounced on their segment of the market early in the development of Australia’s online classifieds market and have built near impenetrable positions.
The fact that these businesses have skipped through the GFC without missing a beat, while traditional media companies have struggled, suggests that in the classifieds advertising space at least print is all but dead.
The interesting question will be whether anyone can challenge these big bad online incumbents. Certainly the positions of CarSales and Seek look extremely strong, but that isn’t stopping people like Baker – who has invested in rival classifieds site CarAdvice – from looking for a few cracks in the armour.
Baker’s smart enough to spread his bets in the complete knowledge that only a few will work. Time will tell if he’s right, but at least he knows he is on the right side of the digital divide.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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