In October 2014, when SPH announced a decline of 6.8% in advertising revenues from newspaper and magazine, it was a sign of things to come. After all, the media giant derived the bulk of its income from advertisements and with the proliferation of cheaper and more effective online marketing platforms, they are beginning to feel the heat. In fact, social media and online blogs like SG Wealth Builder are giving SPH a run for their money. This is because with online blogs and websites, clients can market their products and services to the international market. In today’s context, the motivation for companies to advertise in Singapore newspapers and magazines is becoming less appealing due to the limited market reach.
Indeed, SPH might have seen this coming many years ago when it invested $18 million in ShareInvestor Holding Pte Ltd. Given the high internet penetration rate in Singapore, it made sense for SPH to make its foray into the digital media and establish revenue from its online media arm. Other notable online investments by SPH included Sgcarmart (bought for $60 million in 2013) and Hardwarezone ($7.1 million in 2006). Apart from these mega acquisitions, SPH had been relatively slow in acquiring new online start-ups. The reason for the inertia could be because of the risk in e-commerce and digital start ups. That is probably why SPH only invested in tried and tested online business models with established track records. But then again, if these companies are already successful, why would they want to be sold off cheaply? To invest in these companies, SPH has to make large amount of investments which could take many years to break even.
Therefore SPH has no choice but to continue its online acquisition project. SPH latest acquisition is Singapore Real Estate Exchange (SRX)’s parent company, CoSine Holdings Pte Ltd. I am quite excited by this latest move because SRX is one of SG Wealth Builder’s partners!
Today SPH announced that its wholly-owned subsidiary, SPH Interactive Pte. Ltd., has acquired a 60% equity stake in privately-held CoSine Holdings Pte. Ltd. Cosine is the holding company for the StreetSine Technology Group, which consists of StreetSine Singapore Pte. Ltd., StreetSine Hong Kong Ltd., and the digital platforms Singapore Real Estate Exchange (SRXTM) and Hong Kong Real Estate Exchange (HRXTM).
The purchase consideration of S$30 million for the 60% stake was arrived at on a willing-buyer, willing-seller basis and was paid in cash.
StreetSine Singapore will integrate SRX and STProperty onto one digital platform that will offer consumers and real estate professionals end-to-end real-time information, property applications and other services for efficiently transacting real estate in Singapore. STProperty will retain its brand but will be completely integrated with SRX, HRX, srx.com.sg, and professional mobile applications including Agent ConnectTM, New Project MarketingTM, and SRX AnalyzerTM.
Co-founders Sam Baker and Jeremy Lee will maintain a combined stake of 40% in StreetSine and will continue to run the company as Chief Executive Officer and Chief Technology Officer, respectively.
Mr Leslie Fong, Senior Executive Vice President of SPH’s Marketing Division, said:”StreetSine has set the standards for providing users with real-time pricing information and easy computation like X-ValueTM, the market’s standard for computer-generated real-time property appraisals. STProperty has all the up-to-date and reliable listings any consumer could possibly want. By combining SRX and STProperty, we offer consumers and real estate professionals a one-stop shop for all the information they will need for all property-related transactions. That’s win-win-win.”
Expected benefits of the deal include:
- Greater Access to Real Estate Information. By integrating with SPH and STProperty, StreetSine expects to provide the real estate market with greater access to real-time property data and information. This information, including proprietary price indices, real-time price data, and trend analysis, will empower consumers, real estate agents, property developers, appraisers, credit analysts, researchers, government policy analysts and other property professionals to make more informed decisions about the market and individual property transactions.
- Broader Listing Distribution. The integration of StreetSine with STProperty and various SPH digital and print offerings will create the most far-reaching, digital property listing platform in Singapore. This will bring economies-of-scale to consumers and their agents, estate agencies, developers and other property-related vendors.
- Enhanced Value and ROI for Advertisers. This deal will allow StreetSine and SPH to offer shared services and marketing platforms for advertisers that enhance agent productivity, marketing of property-related services, and deliver greater return on investment to advertisers.
- Technology Innovation for SPH Digital. StreetSine brings independent and advanced software engineering capabilities to SPH.
- Synergies. Integrating STProperty with StreetSine will allow operational synergies between the 2 businesses to be reaped.