Telegraph to spin off online arm

The Telegraph Group is to spin off its online interests into a

separate company, Hollinger Telegraph New Media - but will integrate the

online sales staff into the newspaper’s ad department.

The new company, designed to extract greater shareholder value, will

employ 70 people including 15 commercial staff who will sell ads and

sponsorship and develop e-commerce.

Some of these staff currently work for Electronic Telegraph, some will

transfer from the Telegraph’s ad department and a few will be new

hirings.

But all will report to Telegraph classified advertising director Mark

Payne, who is to take on the additional role of commercial director of

the new company. The Electronic Telegraph’s sales team was previously

run as a separate department.

The focus of the company is to develop Electronic Telegraph into a

market leading multi-functional site. It currently has 17 different

strands including Juiced.com for students, the planet.co.uk for travel

and a jobs site - appointments.co.uk. The immediate goal is to develop

the service in core Telegraph subject areas such as cars, money and

jobs.

’We want to get more serious and make our recruitment advertising more

commercially viable,’ said Hugo Drayton who is to move from marketing

director of The Telegraph to managing director of the new company.

The Telegraph is concerned that it is still perceived by analysts as an

old fashioned print company with an ageing newspaper readership. It has

watched enviously as the likes of Dixons has spun off Freeserve and

extracted huge new value for the company.

Aside from Electronic Telegraph, its online interests include search

engine UKMax.com, a half share in Handbag.com and a 45 per cent stake in

Interactive Investor International whose key brand is iii.co.uk - the

stock market and personal finance site.

The new company will make these interests more visible and valuable

enabling a flotation at a later stage.

This article was first published on Campaign