Fairfax’s planned Weekly Review deal ‘mind numbing’: REA boss

REA boss Greg Ellis has taken the unusual step of commenting on what its closest rival Fairfax Media’s Domain.com.au is doing following the release of interim results yesterday.

Having reported a 32% jump in first half net profits to $41.2 million but a second successive drop in paying real estate agencies, Ellis scoffed at Fairfax’s proposed $35 million investment in 50% of MMP Holdings, publisher of real estate listings magazine The Weekly Review.

Under the proposal, the joint venture would roll the Domain brand across the MMP group, with the aim of build a stronger internet and app presence in the real estate industry.

Asked what he thought about the deal at an analyst briefing yesterday, Ellis said: “It’s mind-numbing. It’s not what you’d expect at No.2 who’s declining to do.”

“Outsourcing your media business is a concept that is frankly beyond me.”

Fairfax media CEO of marketplaces Nic Cola hit back at Ellis and said the investment was a “good deal”, which would add to its earnings.

Fairfax’s investment in MMP Holdings is still to be approved by the ACCC.

The Weekly Review was set up by former Fairfax property editor and marketing manager Anthony Catalano in 2010, featuring glossy articles and real estate listings and distributed to about 200,000 people from Melbourne's affluent bayside suburbs to middle Camberwell and also – via a separate edition – to the Heidelberg and Ivanhoe "green belt".

REA Group is 61% owned by Fairfax rival News Limited, which yesterday increased its weight on the board with the appointment of advertising man Hamish McLennan executive vice-president, office of the chairman at News Corporation.