SERVICES

E-MAIL SERVICES
CNN MOBILE
CNN AVANT GO
DESKTOP TICKER
ABOUT US
AD INFO

CNN TV

what's on
biz international
inside sailing
the music room
show transcripts
how to get CNN TV
anchors/reporters
bureaux
CNN Partner Hotels

EDITIONS

CNN.com U.S.
CNN.com Asia
CNNArabic.com
CNNEspañol.com
set your edition

Fairfax's SOLD.com.au goes to Yahoo!

By Nic Hopkins
CNN.com Writer

SYDNEY, Australia -- Publishing group John Fairfax has initiated a long awaited move to consolidate Australia's crowded online auctions market.

The company's Internet division f2 has offloaded its auctions site SOLD.com.au to Yahoo! Australia & NZ, as part of a broader $A30 million ($15.9 million) deal.

The move comes amid pressure on online auction companies from increasing competition and falling margins, and marks Yahoo! A&NZ's first buy-out of a direct rival in the Australian market.

The regional arm of U.S. Web auctions giant Yahoo! has already invested in the job search company Seek and auto merchant carsales.com.au.

"If the right opportunity arises to invest in a business we will do so. SOLD is a great business and we're happy to make it part of the Yahoo! Network," said Tony Faure, Yahoo! A&NZ managing director.

Strong profit from the sale

Fairfax chief executive Fred Hilmer says his company, which is due to release its first half profit results Friday, had booked a strong return on its total spend of $12 million to build SOLD.

SOLD boasts the largest number of Australian-dollar auction listings, claiming to have more than 50,000 available on its site and deriving revenue from listing fees, commissions and advertising.

It drew upon the classified advertising strength of Fairfax, which operates a large newspaper publishing empire.

However, it received tough competition from Yahoo! A&NZ, News Corp's GoFish and eBay A&NZ, a division of Internet investment group ecorp.

Auctions in Australia "a relatively small business"

"The auction space in Australia is a relatively small business," f2 chief executive Nigel Dews told CNN.

"We could have bought the business to profitability, it was doing record volumes, but it wasn't going to be really large. To really grow that business it needs to be part of a global platform."

With several smaller rivals also in the market, analysts have always expected to see rationalization among the key players.

"Fairfax have been shopping SOLD around for a while, so this comes as no surprise," says analyst Ramin Marzbani of AC Nielsen/Consult.

Fairfax seen "retreating from the market entirely"

"It seems as though Fairfax is retreating from the market entirely, going back to just newspaper classifieds."

Under the deal, SOLD will be folded into Yahoo!'s local auction business, with Yahoo! promising to retain as many staff as possible.

The agreement will also see Yahoo! A&NZ distribute SOLD content to f2's network of sites and place Fairfax real estate content on its own regional portal.