February 16, 2004

"Our biggest differentiator (from Google) is we have all this local content. So if (you) go to Google today and search for a restaurant in Kew, you might get two restaurants.

Andrew Day doesn't wear a tie to work and embraces the open plan, casual-dress office, giving the impression of operating like one of the dotcom kings of the past. It's therefore ironic he's about to take on the biggest names in the online world, like Google and Yahoo.

Day is chief executive of Sensis, Telstra's powerhouse directories arm. He is about to take his company - until now, primarily a print-oriented business based around the White and Yellow Pages - and create a new online search engine in the quest for more revenue.

For the first time, Day is willing to put a time frame on when his company is to take on Google: the next six to nine months, as a new search brand is wheeled out.

"Print is really our core, but the next frontier for us is search. We've really been in the search business for 50 years," said Day.

"The Yellow Pages is a search book. We don't call it that because it's not trendy. "But we will start to go into a more Google search environment. This is for people that don't want to look in Yellow Pages online because they've always searched through Google or Yahoo.

"If you go to our future search vehicle and we put all the White and Yellow pages, CitySearch and Whereis content on it, plus internet content, the same search in Kew will get a much bigger reply" - marrying local search and internet search together in one search capability.

"We expect we'll have something in the marketplace in the next six to nine months." After the service has been introduced to the internet, Sensis will offer the same service in voice (by calling an operator), mobile phone (your phone will recognise your position and send you a list of the 10 nearest Malaysian restaurants) and, eventually, interactive television.

"We will be looking like a Google, but an Australian Google," according to Day. Although Sensis is a subsidiary of Telstra, it is certainly well cashed up to expand.

Last financial year it took $1.2 billion in revenue, and recorded earnings before tax of $650 million. Day believes it is possible to multiply that earnings result by 10 to create an estimate of Sensis's current market value, which would put it in the top 20 companies on the Australian Stock Exchange if it were listed.

Its financial success has led many to conclude that, if for political reasons the second half of Telstra cannot be sold, perhaps floating Sensis would be a good second option to extract value out of Telstra.

As far as Day is concerned, a Sensis float is not on the agenda. "The issue of a float is really a Telstra issue. I don't think they have any plans at all," he said.

It might surprise some to know that Sensis, which Day says gets 99.5 per cent of its revenue from advertising, receives 13 per cent of total Australian media spending. In the online world it attracts almost 25 per cent of total advertising dollars.

While Sensis's $1.2 billion in revenue still puts it behind the amount of advertising revenue that either newspapers or television enjoy, Day gives the impression he'd like to be No.1 in the medium term.

"We'll close the gap because we do have strong growth in print and we do have stronger growth online than most newspapers in Australia would have today," he said.

Source: The Age.com

        

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