Simon Baker takes stake in new car classifieds venture CarAdvice

Online classifieds guru Simon Baker has emerged as an investor in car website CarAdvice and will help steer the site’s new classified advertising venture.

Baker, best known as the former chief executive of real estate classifieds giant Realestate.com.au, now runs his own investment and classified service company, Classified Ad Ventures.

Baker, who will join the board, says he has been in discussions with CarAdvice for around 12 months, tracking the site’s progress and getting to know the business.

Until now, the site has operated around the traditional display advertising model, building a community of car enthusiasts around industry news and car reviews. The company claims 450,000 unique visitors a month based on statistics from Google Analytics.

Baker says the site’s loyal audience should provide a strong base for the classifieds business.

“When you do classified sites, you’ve got to generate content and you’ve got to generate an audience. Generating the content is the easy bit, but these guys have done a great job of building an audience around editorial.”

CarAdvice will go up against a dominant player in the classifieds sector in CarSales.com.au, which recently listed on the Australian Securities Exchange and has a market capitalisation of almost $1 billion.

David Holmes, chief executive of CarAdvice, says the big strategy in taking on CarSales will be selling ads at a lower price. The standard CarSales listing starts at $50, but CarAdvice will start its ad pricing at $25.

“It’s time to be the a little bit more of the aggressor in this market,” Holmes says.

Despite the sharply lower pricing model, Holmes is confident that CarAdvice can remain profitable due to its extremely low cost base. For example, the classifieds site cost less than $10,000 to build.

Holmes, who joined the business in July and was formerly an executive with online agency One Digital, has been brought in to give the company a more commercial business. He recently bought display advertising back in house (ads were previously sold by Sensis) and forward bookings are up 400%.

Baker says he has also been attracted by the potential for overseas expansion, as 40% of CarAdvice’s audience is outside of Australia, with a big chunk in the US. Baker sees the potential to expand into these markets once the Australian classifieds business is up and running.

“This is a good investment opportunity. At the end of the day, CarSales is worth a $1 billion. Even if CarAdvice was worth one percent of that I’d be very happy.”