Jul 262012

Optus today announced the purchase of restaurant review site Eatability for $6 million.

Eatability is one of the services that’s destroyed the business models of both the phone directory business and that of newspapers.

Thirty years ago the Sydney Morning Herald launched its Good Living section and it became the way people went found where the good places were to eat.

Diners wanting to make a reservation at the hip eating places being reviewed in Good Living picked up the phone book.

Now they do neither, they go to web sites like Eatabilty or Yelp where they get reviews, contact details and everything else they need about the venue.

Which killed the advertising revenues that newspapers and phone directories depended upon.

The sad thing is both the newspapers and Yellow Pages could have owned this space. Citysearch was setup by Fairfax to address the online market and it was sold to Telstra when the newspaper chain struggled to make it work.

Citysearch today languishes neglected and nearly forgotten under the Sensis umbrella. Optus now owning Citysearch’s biggest local competitor which must bring a hollow laugh to those involved in the early days of Fairfax’s digital experiment.

Whether Eatability thrives under Optus remains to be seen, but it illustrates just how incumbent strengths like telephone directories are being eroded in the online world.

Old men have to start moving quickly if they don’t want upstarts eating their lunch.

  One Response to “Eating the Old Man’s lunch”

  1. Hi Paul. My name is Damian Glass. I’m from the Corporate Affairs team at Sensis. I’ve read your blog titled ‘Eating the old man’s lunch’.

    I note you’ve mentioned Yelp as the sort of online service consumers use nowadays when they’re looking to purchase.

    Indeed, Yelp is a world leading social networking local search and reviews based website with over 71.4m visits per month and over 27m reviews.

    The influence of online services like Yelp was further highlighted in this year’s Yellow Social Media Report – 70% of respondents indicated they read an online review before purchasing a product or service.

    The Report also revealed, on average, consumers read five reviews on social media before they purchase a product or service, and a further 24% actually contribute review content.

    Given Yelp’s market dominance and the depth of Sensis/Yellow Pages local SMB database, a partnership between our respective organisations seemed obvious.

    The partnership was announced in July 2011, and one of many benefits is that Yelp ratings and reviews are published across Sensis/Yellow Pages digital properties, helping to create a richer experience for our user base.

    Similarly, BigPond Dining, an online website that features the ability to connect you to more than 2,000 restaurants, to view if there are any available tables, was launched in June. The service is backed by Dimmi, Australia’s largest online restaurant booking service.

    We regard these online services as complementary to our business. We don’t own this space, but we certainly have a strong presence which we’ll look to expand in the future.

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