Online Takes Aim with Plenty of Fire Power

Online Takes Aim with Plenty of Fire Power

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It’s been brewing for years and finally, Australia’s two biggest media companies, News Ltd and Fairfax Media, have acknowledged the elephant in the boardroom – online! Their only problem now, is how to transform their business models into lean, mean revenue making machines? Pretty easy, when they already have excellent journalists. The immediate problem is the replacement of the print dinosaurs executives who kept bashing and starving the elephant which is now stampeding.

If I were Fairfax Media CEO, the first person I would call would be James Hooke, the past Fairfax Media Managing Director NSW. In my opinion, the only person who (in my past dealings with Fairfax Media) knew exactly how to marry print with online and deliver a successful outcome for staff and shareholders.

James left Fairfax Media for a position in America in June/July 2007. I well remember an email exchange that took place in December 2008 when Fairfax Media replaced CEO David Kirk for Brian McCarthy. It went like this – there is no newspaper company in the world that has found a solution to declining classifieds and internet migration. I suspect this may be because there is no easy solution. Fairfax has done no better and no worse than others. It will take a massive reinvention to prosper and this is not something that “an old newsprint hand” is well suited to. The company doesn’t need to do what good newspaper companies have traditionally done as this will see it die. It needs someone with new ideas not someone who is excellent at implementing old ideas. In my humble opinion, Hooke is the standout candidate for Fairfax Media. I would also add that James is a subscriber to Virtual Realty News although we have not communicated for a few years now.

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I read with great interest this week an article written by Eric Beecher on Crikey and later published on Business SpectatorCorbett let Fairfax die on his watch. “Almost every time a company fails or stumbles, industry experts saw the fall coming before the board. The board is often the last to know that its company has serious problems. The Fairfax board of 2004 took that prediction (from Back to The Drawing Board by Colin Carter and Jay Lorsch) to heart. After listening to my prognosis that the company faced a potential collapse of its traditional print model – I sketched out what I described as a “catastrophe scenario” under which The Sydney Morning Herald and The Age would lose much of their classified advertising in coming years – the Fairfax board studiously ignored my plea to implement overlapping strategies as “insurance” against that possibility.”

“One director, in particular, became quite agitated about what I was saying. “I don’t ever want anyone coming into this boardroom again,” he told colleagues as he held up a copy of one of Fairfax’s hefty Saturday papers, “and telling us that people will buy houses or cars, or look for jobs, without this.” He then dropped the lump of newsprint onto the boardroom table with a thud. That board member was Roger Corbett, now the chairman of Fairfax.” I believe it is well overdue for the Fairfax board to start looking at the new age online generation of like minded business executives.

The problem with Fairfax Media is that it is paying a huge toll by weighting its advertising schedules (and concentrating on consumers with fewer advertisers who pay more) and completely ignoring more advertisers who pay less. Immediately rescue Saturday Domain, abolish the midweek publications by bringing the advertising costs down and completely revamp the online model Domain which has remained relatively dormant of innovation for years. At least (in my opinion) it’s online model is better than the alternative realestate. If only Fairfax Media knew how much better they could do in this category.

Economy expected to grind to a halt in the second half of 2012 – according to the Westpac – Melbourne Institute Leading Index and this would certainly be helped whilst lenders drag feet passing on rate cut. It is most embarrassing that lenders pass on increases to the cash rate almost immediately yet procrastinate for ages on passing on rate reductions. Westpac managing director Gail Kelly says compound growth in house prices are over for good as Australians are fast rejecting high levels of debt (see graph above). It is abundantly clear that home owners stay put as prices slump as data reveals that homes are now changing hands at the slowest pace since at least 2000.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 94
    • Number of houses on the market this week – 85
    • Number of houses on the market this time 2011 – 97
    • Number of apartments on the market last week – 89
    • Number of apartments on the market this week – 89
    • Number of apartments on the market this time 2011 – 99

    CREMORNE – 2090

    • Number of houses on the market last week– 16
    • Number of houses on the market this week – 14
    • Number of houses on the market this time 2011 – 17
    • Number of apartments on the market last week – 19
    • Number of apartments on the market this week – 20
    • Number of apartments on the market this time 2011 – 38

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 17
    • Number of houses on the market this week – 17
    • Number of houses on the market this time 2011 – 12
    • Number of apartments on the market last week – 54
    • Number of apartments on the market this week – 50
    • Number of apartments on the market this time 2011 – 63

For this week’s sales in Cremorne real estate, Cremorne Point real, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, , Neutral Bay real estate, Cammeray real estate.

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For this week’s open for inspections
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With the Carbon Tax just over a week away, the 2011 census has revealed that monthly mortgage payments up 38% to $1,800 a month since 2006 and renters paying 50% more a week in rent since 2006. To put this into proportion on how this affects Australian households:

It will be most interesting to see how these statistics change with the 2011 census. I don’t expect much change from the 30/30/30 splits.

Cheers ^_-^

 

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