Mike Houghton writes:

The daggers are out for Sensis,
Telstra’s online directory offshoot which chief executive Sol Trujillo
predicts will account for nearly half of the company’s revenue growth
in the next three years.

Sensis tells us it “serves the
advertising needs of almost 600,000 Australian businesses,” while “the
entire paid search industry has less than 15,000.” And Sensis’s share
of “the combined main media/online advertising market is 13.5% compared
to 3% for the entire online advertising industry (without Sensis).”

there’s an important proviso. Sensis may market itself as an internet
search engine, but the figures the company trumpets include sales and
revenue from the paper-based Yellow Pages. One of its rivals,
News Ltd, reports that only 7% of Sensis’s sales come from online
activities, and that 68% of its sales come from the Yellow Pages in book form. (We put these figures to Sensis, who have yet to dispute them).

there are real doubts about Sensis’s ability to exploit the online
space, and fulfil its predictions of $3bn in revenue by FY10 from
$1.585bn in FY05 – and today Crikey received this tip about how
Sensis’s Trading Post business is really performing:

The re-branding of Trading Post nationally has failed to grow circulation. If the decline in circulation continues, the entire Trading Post
business model could implode requiring a massive restructuring of the
business and forcing Sensis to admit it paid too much and potentially
forcing a revaluation.

2004-2006 Trading Post sales:
Sydney 65 to 43
Melbourne 95 to 68
Brisbane 65 to 45
Adelaide 35 to 27

Profit Summary
2005 June Financial Year $64.5M EBITDA
2006 June Financial Year $71 EBITDA Budget
2006 June Financial Year $61M EBITDA – Reforecast
2006 June Financial Year $58M Latest expectation