I think even more apt as it relates to Fairfax will be ‘ex nihilo nihil fit’ or from nothing, nothing comes.

Fairfax online stable mainstays theage.com.au and smh.com.au get a lot of their content, credibility and promotion from their print editions. Sure a lot of the sites’ traffic comes from trashy yarns about Lara Bingle this and Paris Hilton that but without those print editions, there doesn’t seem to be much of a future or purpose in any of it. It’s certainly not difficult to replicate armed with copies of New Idea and colour glossy trash-mags. But do advertisers want to reach that audience? I doubt they will in the long-run.

Having ceded its monopoly/dominance in real estate, autos and jobs ads, Fairfax’s newspapers increasingly look like they belong to another era. The days of Melbourne and Sydney being blessed with two metropolitan daily newspapers seem numbered because they The Age and SMH were/are so utterly dependent on classifieds and that revenue stream is dying.

While others may play around in those areas online, as Fairfax belatedly did, it looks like Google is set to dominate in real estate and could muscle in to any category at any time should they have the desire.

Fairfax legacy news related online-only websites might survive the impending death of The Age and SMH in some form (probably like the brisbanetimes.com.au) if they are profitable. But I hear they are not.

I doubt Fairfax Digital’s Mr McCarthy will share any details on that matter. Indeed, his description of their strategy didn’t talk much about the news sites at all. How ominous for the nervous brigade of Fairfax editorial folk.

Again, this is hardly a strategy model or a model strategy? (But quite a nice strategy for the TradeMe founder investors!)

I can confirm my earlier statement, as I’ve seen the numbers and we talk about it publically in industry speeches etc., that more than half of Fairfax Digital’s revenues are from transactional revenue models, not advertising.

Re Trademe. As stated in the press, the acquisition price for Trademe was circa NZ$700m. But the total value of an acquisition must be viewed in proportion to its return and growth profile. Trademe currently serves 70% of all webpages in New Zealand, dominates auctions/online retailing, has taken the leadership position in motoring and real estate classifieds and is a strong 2nd place in employment classifieds. It has also developed and acquired businesses in the travel category. TradeMe’s growth has been strong over the 4 years since acquisition and it continues to enter and grow new sectors to maintain this. As a result, the return that Fairfax is enjoying on this investment has proven that the acquisition price was by no means “expensive.”

Fairfax Digital includes both Australian and New Zealand operations. In the New Zealand market, TradeMe is by far the lion’s share. The ROCI (return on cash invested) of purchasing that business is extremely positive, well above the business case that justified its acquisition and one that any VC would be paying out big bonuses for. We thank you Mr. Kirk!

Your facts on Australia aren’t up to date. Fairfax Digital Australia makes the majority of its revenues from transactions not advertising (excluding classifieds). We have been actively diversifying away from advertising as a primary business model and into hybrid revenue streams since 2005. In answer to your questions Marcel and Man, we are operating 15 different types of transactional revenue streams that are each over $1m in revenue. The range is broad, but it includes people paying to contact others on our dating site, RSVP, holiday property owners paying us commission whenever someone stays at their property when booked through our Stayz site, trailing commissions on investments made through our InvestSMART site, payment by consumers for property data through our HomePriceGuide site. Our model is to aggregate an audience around an area of interest by providing them deep, quality content, then looking for multiple ways to generate revenues from that audience sector.

Edward, you are right, we have suffered from “the Innovators Dilemna” and aren’t the leaders in the 3 digital classified streams (cars, jobs, houses) in Australia (wouldn’t that be nice!), but our classified sites are world class, are well trafficked and, in some cases, lead the national competitors if you just look at NSW and Victorian state numbers (obviously we get a kick from our metro newspapers in these markets). Nevertheless, our digital classifieds do make significant profits and are growing (and we have a few tricks still up our sleeves..).

As for your comment on ‘taking demographics down market’ I beg to differ. Roy Morgan Research data tells us that online readers of our masthead sites are younger and, actually, slightly more affluent than the readers of our metro newspapers. Both are higher demographics than our respective online and print competitors.