Ailing Telstra subsidiary Sensis has announced that it will acquire online directory company TrueLocal from News Limited for an undisclosed amount, subject to regulatory approval.
Sensis managing director John Allan, who came over from News Limited himself in July last year, said today that TrueLocal would form a part of the Yellow Pages network if the deal is approved by the Australian Competition and Consumer Commission (ACCC).
"TrueLocal has built a strong reputation in connecting consumers with businesses across the country, through its high-quality local business listings," he said in a statement.
"TrueLocal also has an extensive library of ratings and reviews, which enables consumers to make more informed decisions when they search for a local business. Consumers' reliance on this type of content underlines why it's important to make it accessible — which drives more traffic to the Yellow Pages network, and generates better leads for our customers."
News Limited's chief financial officer Stephen Rue said that the decision to sell TrueLocal came as the company shifted its focus away from online directories.
"TrueLocal is a terrific business. But the reality is it is no longer a priority for us, as we have recently made substantial investments in Foxtel and Fox Sports and Business Spectator and Eureka Report," he said.
"So, while we are sorry to see TrueLocal go, we recognise that Sensis is now the best home for it. John Allan knows the business better than anyone, and we wish him and everyone at TrueLocal all the very best."
TrueLocal's current general manager, Simon Carson, and the rest of the management team will remain on if the acquisition is approved, and the company will continue to operate in its current form.
The move comes as Telstra's digital media unit works to turn Sensis' fortune around. The company, which was historically responsible for the Yellow Pages and White Pages printed directories, has struggled to cope with declining advertising revenue as more Australians turn online to find businesses and other addresses.
In the 2011-12 financial year, total revenue for Sensis declined by 16.1 percent to AU$1.5 billion, and Telstra attributed this to the market shift from print to digital advertising quicker than was predicted.