Trade Me, the country’s busiest website, has been sold to Fairfax media group for $700m.
The deal, which includes founder Sam Morgan’s ongoing employment for up to two years, comes with a $50m sweetener if certain unnamed earnings targets are met over the next two years.
Morgan began Trade Me in 1999, exploiting a hole in the market, and it quickly became the country’s leading online auction site. Morgan has expanded the service and offerings of Trade Me regularly since then, and the site now sells real estate and cars as well as second hand goods.
Trade Me overtook Telecom’s XtraMSN website as the country’s busiest site late last year and Telecom has responded by launching its own online shopping mall, Ferrit.co.nz. While Ferrit is initially aimed at new goods rather than second hand ones, documents obtained by the National Business Review suggest it has its sights firmly locked on Trade Me’s market share.
The deal eclipses all of New Zealand’s previous tech success stories. Murray Haszard sold his disk copying utility Ghost to Symantec in 1998 for $30 million, while Peter Maire sold Navman to US corporation Brunswick in 2003 for $90 million. Even Ihug was sold to Australian ISP iiNet in 2003 for “only” around $30 million.
In 2003, Fairfax bought the INL newspaper chain in New Zealand for $1.2 billion. The chain included around 80 newspapers including the Dominion Post in Wellington and The Press in Christchurch.