Friday, November 12, 2010

The Australian newspaper on Wotif, Webjet and other AU online success stories

Interesting read this week from James Dunn in the Australia called "Rising from the Ashes". Ten years on from the Dotcom boom he discusses some of Australia's high profile online success stories such as Wotif, Webjet, Seek (jobs site), Realestate.com.au and Carsales.

One of my favourite parts is where he points out that the combined market cap of Seek, Releastate.com.au and Carsales is more than Fairfax (one of Australia's largest media companies and one that suffered the most in losing classifieds business to the online companies).

The article is also worth a read for some of the commentary on Wotif and Webjet including this section
A lot of market share is advertising-driven, it's all about exposure: if you start to see a lot of marketing spend from competitors like Zuji, it could [affect] both Webjet and Wotif. Hotels.com is another new entrant . . . It's a sign that the high margins that Wotif and Webjet have been used to experiencing, there are now other people after their lunch."

Hopkins says Wotif is a different business model from the other four web-based stocks, in that what goes online is distressed inventory and short-term bookings. "Wotif is suffering from, one, a quite strong rebound in hotel accommodations, which means the hotels aren't putting as much inventory on Wotif; and, two, it is not strong on the international side of things, so the strong Australian dollar, with a lot of people going offshore for holidays, has hurt them quite a bit.
"The short-term earnings outlook is pretty flat, but in the long term we think Wotif is still a strong business; it's still very dominant in its sector."

3 comments:

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Once Were Warriors said...

At the same time, the journalist should have looked at the colossal failure of the online travel leader 10 years ago to capitalise on its market dominance. travel.com.au went down in flames having lead the way in online travel from 1997 to at least 2002/3 and is a mere faint shadow of it former self (the focus shifted to lastminute.com.au) If attention had been paid to this business and had most of the talent that got it to the top in the first place had not been shoved aside - we would have had a viable and competitive #2 and perhaps at times #1 in the Australian market.

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