Fairfax has followed Seven West Media and a Westpac-backed venture capital firm in taking a 25 per cent stake in neighbourhood social network Nabo.
Fairfax has continued to diversify beyond traditional media with the acquisition of a 25 per cent stake in neighbourhood social network Nabo.
Fairfax, which posted a full year profit of $83.2 million thanks largely to its real estate advertising business Domain, said Monday it had followed Seven West Media and a Westpac-backed venture capital firm in buying a quarter of the business.
Fairfax didn't say how much it had paid for what it called a strategic investment or how it anticipates benefiting, but pointed out that it had already invested in the New Zealand equivalent, Neighbourly.
Nabo connects residents with each other, local organisations and councils so they can find out and discuss what is going on in their area.
Founder and chief executive Adam Rigby said his network, which operates in more than 5,800 suburbs across Australia, would in future involve introducing small and medium local businesses to users in what he called "a sympathetic way".
He said that distinguished Nabo from a site such as hipages, the tradie search site in which News Corp Australia bought a 25 per cent stake on Monday.
"Nabo has always been and will always be a network for community, first and foremost. It's not primarily going to be a lead generator," Mr Rigby said.
"While a lot of people recommend tradespeople to one another as well as helping with babysitting, or helping each other with a practical task such as lending a ladder ... it's really about bringing communities together and having that tight connection and communication and interaction."
Nextdoor, a US site similar to Nabo, has moved to an advertising-based business model.
Fairfax, which owns the Sydney Morning Herald, Australian Financial Review and The Age newspapers, said last month that it was in a strong position to pursue strategic opportunities due to the $64 million in cash on its balance sheet.
"This is a compelling investment for Fairfax ... The digital business strongly aligns with Fairfax's long history of connecting communities via hundreds of newspapers and websites across rural, regional and metropolitan areas," Fairfax managing director of Australian publishing Allen Williams said.
Mr Rigby said the deal wasn't about generating direct income for Fairfax.
"It's strategically absolutely a perfect fit with their community newspapers," Mr Rigby said.
"They've got 170-odd publications that are squarely focused on communities and bringing communities together and giving communities a voice and a presence and that's exactly what Nabo does."
At 1450 AEDT, Fairfax shares were up 1.25 cents, or 1.38 per cent, at 91.75 cents.