Telstra paid US$254 million for a controlling stake in SouFun Holdings Limited, which runs one of China's largest real-estate and home improvement Web sites, the company said Thursday.
Telstra, Australia's largest telecommunications company, now owns a 51 percent stake in SouFun, and plans to use the acquisition to beef up its advertising business in China. SouFun makes money by selling advertising on its Web site. Telstra's advertising arm, Sensis, will help manage SouFun going forward, the companies said in a joint statement.
The deal is also part of a broader plan by Telstra to expand its Sensis business beyond Australia and carry its intellectual property and management expertise to new areas, the company said.
The founder and chief executive officer of SouFun, Vincent Mo will remain in charge at the Web site and retain his 30.9 percent share of the company. SouFun's management team will remain in place after the deal, the company's said.
SouFun, which is already cash flow positive, is expected to post revenue of $52 million in 2007, with a profit of $18 million after excluding income tax, depreciation and amortization, according to the companies.
IDG News Service is a member of the IDG group of companies, which includes IDG Ventures, a US$1.4 billion venture capital fund which holds a 14.7 percent stake in SouFun.
SouFun can be found at: http://www.soufun.com/