Taking into ac-count of investor protection and competition among securities markets, the combination puzzle of a market, a stock exchange, a securities com-pany, and a self regulatory f
Trang 1both operate a securities market The boundary
between them becomes more ambiguous The
issue is how to implement and secure self
regula-tory function or its substitute measures in order
to protect investors Although a stock exchange
still maintains its character as a self regulatory
organization, its function may be considered
weakened by demutualization Taking into
ac-count of investor protection and competition
among securities markets, the combination puzzle
of a market, a stock exchange, a securities
com-pany, and a self regulatory function increases its
complexity Designing a whole market structure
with consistency is not easy
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Bessembinder, H., & Venkataraman, K (2003)
Does an electronic stock exchange need an
up-stairs market?Journal of Financial Economics,
73(1), 3-36.
Fuchita, Y (1999) Regulations on stock exchanges
and regulations on proprietary trading system
Jurist, 1155, 185-191
JSDA (Japan Securities Dealers Association)
(2002) Development on JSDA regulations
re-lated to announcement system of quotation, etc
of proprietary trading system Shoken Gyoho,
615, 6-13.
Kanzaki, K (2000) Abolition of no off–exchange
trade rule In Shouken Torihiki Hou Kenkyu
Kai (Securities Law Study Group) (Ed.), Kin’yu
shisutemmu kaikaku to shoken torihiki seido (pp
145-160) (Financial System Reform and Securities
Trading System) Tokyo: Nihon Shouken Keizai
Kenkyujyo
Kawashima, I (2001) Electronic securities
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KINYU HO IINKAI (Financial Law Committee) (2002) Interim organizing of issues concerning
WKHFRQFHSWRI³6HFXULWLHV0DUNHW´Jurist, 1225,
38-50
Konishi, N (2000) Regulations on electronic securities market: Focusing on ATS (Alternative
Trading System) Regulation Sandai Hogaku,
33(3&4), 326-360
Miyoshi, H (2000) Shoken shijo denshika no
subete (All about computerization of securities
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Mühlberger, M (2005) Alternative trading sys-tems: a catalyst of change in securities trading
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Nakanishi, K., & Ogura, T (2005) Outline of development of cabinet orders, etc., with respect
to introduction of obligation of best execution
under the Securities and Exchange Act Shoji
Homu, 1726, 31-37.
Nikko Shoken Homubu (Ed.) (1999) Provision
RI GH¿QLWLRQV FRQFHUQLQJ VHFXULWLHV HWF Shoji
Homu, 1528, 28-35.
Osaki, S (1999) Electronic Communications
Network (ECN) Shihon Shijo Quarterly, 3(2),
49-61
Osaki, S (2000) Kabushiki shijo kan
kyoso-NASDAQ no sekai senryaku to nihon
(Competi-tion among stock exchanges: Global strategy of NASDAQ and Japan) Tokyo: Diamond Corp Osaki, S (2001) New PTS (Proprietary
Trad-ing System) Regulation on Japan Shihon Shijo
Quartlerly, 4(3), 66-75.
Osaki, S (2005) Progress in borderless transac-tions on securities exchanges and market
regula-tions In K Egashira & Y Masui (Eds.), Tokeru
sakai koeru ho 3 shijo to soshiki (Market and Organization) 0HOWLQJERUGHUDQGÀRZLQJRXWRI
Trang 2laws No.3) (pp 85-203) Tokyo: Tokyo Daigaku
ShuppanKai
Osaki, S (2006) PTS for night trading of stocks
LQ-DSDQ 6LJQL¿FDQFHDQGLVVXHVNomura Capital
Market Review, 9(4), 16-24.
Osaki, S., & Kozuka, S (2001) Electronic
secu-rities trading and issues on legal system Jurist,
1195, 98-103.
Shimizu, Y (1997) Proprietary trading system
(PTS) in US and competition among markets
Shoken Keizai Kenkyu, 7, 121-140.
Shimizu Y (2000) Alternative trading system
(ATS) in US and SEC regulations Shoken Keizai
Gakkai Nenpou, 35, 83-88.
Yanaga, M (2006) PTS regulations in European
countries Shoji Homu, 1781, 4-19.
Yoshino, I (2001) Current situation and issues
concerning establishment of proprietary trading
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188, 57-70.
Yukizawa, K (2004) Obligation of best
execu-tion in the Securities and Exchange Act Shoji
Homu, 1709, 4-23.
ADDITIONAL READINGS
Amaro, R J (2002) European Union Regulation
RIHOHFWURQLFFRPPXQLFDWLRQQHWZRUNV 6WLÀLQJ
global integration of securities markets Wisconsin
International Law Journal, 20, 397-414.
Avgouleas, E (2005) A critical evaluation of
WKHQHZ(&¿QDQFLDOPDUNHWUHJXODWLRQ 3HDNV
troughs, and the road ahead The Transnational
Lawyer 8QLYHUVLW\ RI WKH 3DFL¿F 0F*HRUJH
School of Law), 18, 179-229.
Badway, E E., & Busch, J M (2005) Ending
securities industry self-regulation as we know
it Rutgers Law Review, 57, 1351-1376.
Beny, L N (2002) U.S secondary stock markets:
A survey of current regulatory and structural issues and a reform proposal to enhance
com-petition Columbia Business Law Review, 2002,
399-473
Borrelli, M (2001) Market making in the
elec-tronic age Loyola University Chicago Law
Journal, 32, 815-908.
Bronfman, C., Lehn, K., & Schwartz, R A (1994) SYMPOSIUM: MARKET 2000: The SEC’s
Market 2000 Report The Journal of Corporation
Law (University of Iowa), 19, 523-551.
Chtaneva, A (2002) Alternative trading sys-tems: Impact of technology on securities market
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342-378
Cohen, P D (1999) Securities trading via the
Internet Stanford Journal of Law, Business &
Finance, 4, 1-38.
Collins, A L (2002) Regulation of alternative trading systems: Evolving regulatory models and prospects for increased regulatory coordination
and convergence Law and Policy in International
Business, 33, 481-506.
Dombalagian, O H (2005) Demythologizing the stock exchange: Reconciling self-regulation
and the national market system University of
Richmond Law Review, 39, 1069-1154.
Fleckner, A M (2006) Stock exchanges at the
crossroads Fordham Law Review, 74,
2541-2620
Frase, D., & Parry, H (2001) Exchanges and
alternative trading systems Sweet & Maxwell.
Gallagher, D M (1998) Move over tickertape, here comes the cyber-exchange: The rise of
inte-grated-based securities trading systems Catholic
University Law Review, 47, 1009-1056.
Karmel, R S (2002) Turning seats into shares: Causes and implications of demutualization of
Trang 3stock and future exchanges Hastings Law
Jour-nal, 53, 367-430.
Klock, M (1999) The SEC’s new regulation ATS:
placing the myth of market fragmentation ahead
of economic theory and evidence University of
Florida Law Review, 51, 753-797.
Macey, J R., & O’Hara, M (1999) Regulating
exchanges and alternative trading systems: A law
and economics perspective The Journal of Legal
Studies, 28, 17-54.
Macy, J R., & O’Hara, M (2005) From markets
to venues: Securities regulation in an evolving
world Stanford Law Review, 58, 563-599.
Matus, G (2001) The regulation of alternative
trading systems: Market fragmentation and the
new market structure New York Law School Law
Review, 44, 583-604.
0D\QDUG7+ :KDWLVDQ³H[FKDQJH"´
Proprietary electronic securities trading systems
DQGWKHVWDWXWRU\GH¿QLWLRQRIDQH[FKDQJHWash-ington and Lee Law Review, 49(3), 833-912.
McCarroll, E (2000) Regulation of electronic
communications networks: An examination of
Tradepoint Financial Network’s SEC approval
WR EHFRPH WKH ¿UVW QRQ$PHULFDQ H[FKDQJH WR
operate in the United States Cornell International
Law Journal, 33, 211-262.
Nyquist, P (1995) Failure to engage: The
regula-tion of proprietary trading systems Yale Law &
Policy Review, 13, 281-337.
Poser, N S (2001) The stock exchanges of the
United States and Europe: Automation,
globaliza-tion, and consolidation University of
Pennsyl-vania Journal of International Economic Law,
22, 497-540.
Rubin L (1998) What is an exchange? Oxford
University Press
Thompson, A R (1999) Taming the frontier?:
An evolution of the SEC’s regulation of internet
securities trading systems Columbia Business
Law Review, 1999, 165-205.
ENDNOTES
1 ‘Multilateral trading facility (MTF)’ means
a multilateral system, operated by an invest-PHQW¿UPRUDPDUNHWRSHUDWRUZKLFKEULQJV together multiple third-party buying and VHOOLQJLQWHUHVWVLQ¿QDQFLDOLQVWUXPHQWV²LQ the system and in accordance with non-dis-cretionary rules—in a way that results in a contract in accordance with the provisions
of Title II of MiFID
2 See, SHIMIZU (1997) pp.121-140, SHI-MIZU (2000) pp.83-88, OSAKI (1999) pp.49-61, KONISHI (2000) pp 326-360, YANAGA (2006) pp.4-19
3 For detailed comparison and analysis, KA-WASHIMA (2001) pp 31-73
4 Brief descriptions of this revision are ex-plained in: http://www.fsa.go.jp/en/policy/
¿HOSGI
5 http://www.fsa.go.jp/p_mof/singikai/sho-ken/top.htm This site page is Japanese text only
6 No off-exchange trade rule is provided as
a rule under the Securities and Exchange Act but was implemented through (a) the provisions of articles of association of stock exchanges and (b) provisions of the regula-tions by the Ministry of Finance concerning business method of securities companies These provisions of the articles of associa-tion and the regulaassocia-tions on business method were abolished in December 1998
7 See, supra note (5)
8 For example, large block trades and basket WUDGHVRILQVWLWXWLRQDOLQYHVWRUVKDYHGLI¿FXO-W\LQHI¿FLHQWO\H[HFXWLQJWUDGHVGHSHQGLQJ
on the auction method under conventional principles of price priority and time priority
Trang 4The auction method requires much time for
execution of large block orders and basket
orders and has a problem that bulk execution
of orders is impossible Economic analysis
on this matter shows the same result See,
Bessembinder & Venkataraman (2003) p
27
9 $V D UHVXOW RI VLJQL¿FDQW GHYHORSPHQW RI
telecommunications and information
tech-nologies, as it became necessary to prepare
such market infrastructure for a new trading
system as ATS in the United States, it is
necessary to take measures for the no
off-exchange trade rule not being an obstacle
to market infrastructure improvements
10 As globalization of securities trading has
continued to develop, trades that prove
dif-¿FXOWWRH[HFXWHLQ-DSDQZLOOHDVLO\ÀRZRXW
abroad to seek an opportunity to execute
abroad In order to maintain the vitality of
the securities market in Japan, it is
neces-sary for the Japanese securities market to be
attractive and convenient for investors No
off-exchange trade rule imposes restrictions
on trades executed by market
intermediar-ies (securitintermediar-ies companintermediar-ies) and it should be
UHYLHZHGIRUSUHYHQWLRQRIRXWÀRZRIWUDGLQJ
overseas
11 See, Osaki (2000) pp 173-198, Fuchita (1999)
pp 185-191
12 SEA Art 37
13 See, KINYU HO IINKAI (2002) pp
38-50
14 See, Yukizawa (2005) pp 14-23, Nakanishi,
& Ogura (2005) pp 31-37
15 SEA Art 37 was deleted by Act No 97 of
2004 concerning Amendment of the
Secu-rities and Exchange Act, which came into
force in April 2005
16 See, infra note (21) and note (23)
17 SEA Art 2(8)(vii)(a)
18 See, Nikko Shoken Homubu (1999) pp
33-34
19 SEA Art.2(8)(vii)(b)&(c)
20 SEA Art.2(8)(vii)(d)
21 6($$UW YLL H &DELQHW2I¿FH2UGL-QDQFHFRQFHUQLQJ'H¿QLWLRQVSUHVFULEHGE\ Article 2 of Securities and Exchange Act (Ordinance of Ministry of Finance No.14
of 1993) Art.8-2 (i)
22 The order book prior to the start of the ses-sion is often complicated with offers (sell)
at lower prices than bids (buy) and bids at higher prices than offers, as well as a mixture
of market offers and bids Under the Itayose
method all orders reaching the order book are treated as simultaneous orders, in other words there is no time priority Bids and of-fers are matched at a single price according
to the principle of price priority
23 6($$UW YLL H &DELQHW2I¿FH2UGL-QDQFHFRQFHUQLQJGH¿QLWLRQVSUHVFULEHGE\ Article 2 of Securities and Exchange Act (Ordinance of Ministry of Finance No.14
of 1993) Art.8-2 (ii)
24 JSDA had operated the market for the Over-The-Counter traded securities known as JASDAQ since 1998 In 2004, JASDAQ market became a market for exchange-listed securities instead of a market for Over-The-Counter traded securities; Jasdaq Securities Exchange was created and all securities listed on the JASDAQ became the securi-ties listed on Jasdaq Securisecuri-ties Exchange
At present JSDA does not operate an OTC market
25 SEA Art.2(8)(vii)(a)
26 Act concerning Amendment of the Securities and Exchange Act (Act No 98 of 2004)
27 See, supra note 24
28 See, Nakanishi, supra note (14) pp 36-37
29 6HHWKH)LQDQFLDO6HUYLFHV$JHQF\³*XLGH-lines for Comprehensive Supervising for Securities Companies” III—2—2—1 (3)3
30 See, Osaki (2001) pp 66-75, Yoshino (2001)
pp 57-70
31 1RZLWLVUHQDPHGDVWKH&DELQHW2I¿FH2U-GLQDQFHFRQFHUQLQJ'H¿QLWLRQVSUHVFULEHG
Trang 5by Article 2 of the Securities and Exchange
Act (Ordinance of Ministry of Finance No.14
of 1993)
32 )LQDQFLDO 6HUYLFHV $JHQF\
³$GPLQLVWUD-tive Guidelines: On the matters to be noted
in supervising securities companies,
in-vestment trust companies and inin-vestment
corporations and securities investment
advisers, and so forth (Part I) Supervision
of Securities Companies.” As stated in the
text, these Administrative Guidelines were
entirely abolished as of July 15, 2005 when
³*XLGHOLQHVIRU&RPSUHKHQVLYH6XSHUYLVLRQ
for Securities Companies” was developed
33
6HHWKH)LQDQFLDO6HUYLFHV$JHQF\³*XLGH-lines for Comprehensive Supervision for
Securities Companies” III—2—2—1 (3)a
34 http://www.pts-info.jp/
35
'HWDLOHGUXOHVFDQEHIRXQGLQ-6'$³5HJX-lations concerning Off-Exchange Purchase
and Sale, and so forth, of Exchange-Traded
Securities, including Listed Stocks” (Fair
Business Practice Regulations, No 5)
(estab-lished on November 18, 1998), Art 7-Art 10,
-6'$³'HWDLOHG5XOHVUHODWLQJWRWKH5HJX-lations concerning Off-exchange Purchase
and Sale, and so forth, of Exchange-Traded
Securities, including Listed Stocks.”
(estab-lished on November 18, 1998), and JSDA
³2Q +DQGOLQJ RI 5HSRUW DQG 3XEOLFDWLRQ
through Proprietary Trading System Price
Information Publication System”
(Resolu-tion of the Board of Directors as of April
23, 2002) See, JSDA (2002) pp.6-13
36
6HHWKH)LQDQFLDO6HUYLFHV$JHQF\³*XLGH-lines for Comprehensive Supervision for
Se-curities Companies” III—2—2—1 (3)3b
37
7KLVLVWKHFXUUHQW³*XLGHOLQHVIRU&RPSUH-hensive Supervision for Securities
Compa-nies” III—2—2—1 (3)3
38 General Administrative Agency of the
Cabi-net and Ministry of Finance Ordinance No
32 of 1998 As the General Administrative
Agency of the Cabinet was reorganized to
&DELQHW2I¿FHLQ-DQXDU\WKHQDPH RIWKHRUGLQDQFHLVFXUUHQWO\WKH³&DELQHW 2I¿FH 2UGLQDQFH FRQFHUQLQJ 6HFXULWLHV Companies.”
39 These are the measures for preventing acts ZLWKFRQÀLFWRILQWHUHVWVLQFOXGLQJLQWHQ-tional crossing when securities companies perform simultaneously purchase and sale
as brokerage and trading having positions
as dealers For example, if the order placed with PTS has arrived via the dealing depart-ment of the securities company, by looking
at the order of the customer, it is possible for the securities company to intentionally match the position of the securities company
or the orders of other customers, while the FRPSDQ\ ¿QGV RXW WKH SULFH RI WKH VWRFN exchange is favorable to the customer The system intends as practicable as possible
to exclude the room for occurrence of acts disturbing fairness of trade by establishing appropriate wall in the securities company for the trading information of customers related to PTS business
40 These nine securities companies are Japan Bond Trading Co., Ltd., ICAP Totan Secu-rities Co., Ltd., Central Tanshi SecuSecu-rities Co., Ltd., Bloomberg Tradebook Japan Ltd., Yensai.com Co., Ltd., JBond Securities Co., Ltd., Japan Securities Agents, Ltd., BGC Shoken Kaisha Limited, and TradeWeb Europe Limited
41 See, Osaki (2006) pp 16-24
42 6WRFNWUDGLQJÀRRUVLQ-DSDQZHUHDEROLVKHG
in December 1997 at Osaka Securities Ex-change and in April 1999 at Tokyo Stock Exchange
43 See, Miyoshi (2000) pp 135-138
44 See, Mühlberger (2005) pp 8-9
45 See, Osaki (2005) pp 185-203
46 See, Osaki & Kozuka (2001) pp 98-103
This work was previously published in Cyberlaw for Global E-business: Finance, Payments, and Dispute Resolution, edited
Trang 6Chapter 4.20
Sensis.Com.Au:
An Uprising Star of E-Innovation and
E-Entrepreneurship
Fang Zhao
RMIT University, Australia
ABSTRACT
Sensis Search, a young entrepreneurial dot-com
ODXQFKHGLQLVWKH¿UVWPRYHULQUHGH¿Q-ing the Australian search market and creates a
new paradigm for Internet searches that delivers
relevant, quality local, and global results This
chapter focuses on exploring the experiences of
Sensis Search and identifying key issues of its
operation Data for this qualitative case study
was collected mainly from two primary sources:
(i) a documentary research into Sensis’ business
reports, online newsletters, memos, agendas, and
RWKHU RI¿FLDO SXEOLFDWLRQV DQG LL DQ LQGHSWK
interview with a senior manager of sensis.com
au The case study illustrates how Sensis has been
managed, how it has succeeded, and what lessons
can be learned from its experience
INTRODUCTION
In 2002, Sensis Pty Ltd was launched as a new
corporate brand and company name to replace WKH 3DFL¿F $FFHVV 3W\ /WG D ZKROO\RZQHG subsidiary of Telstra Corporation, Australia’s largest telecommunication company According
to the CEO of Sensis, the name of the company 6HQVLV UHÀHFWV WKH HVVHQFH RI WRGD\¶V EXVLQHVV
— keeping people in touch through appealing to the key human senses of sight, sound, and touch, using different media — print, voice, online, and wireless (Sensis, 2002) To strengthen the strategic
position of Sensis in online advertising
busi-ness, the company acquired CitySearch Online and BMC Media Ad Sales, adding new lines of advertising business to Sensis After two years’ operation driven by an aggressive growth strat-egy, Sensis has developed into one of Australia’s leading advertising and search companies, offer-ing a suite of print, online, voice, and wireless
Trang 7products designed to bring buyers and sellers
together any time, anywhere Sensis Pty Ltd has
a team of over 3,100 employees, among whom
2,300 are directly employed by Sensis and 800
by its wholly-owned subsidiary the Trading Post
Group of companies
Sensis’ products and solutions include:
• Sensis Search (www.sensis.com.au) — an
Internet search engine that utilises some
of the most comprehensive and up-to-date
product and service listings in Australia,
with a much greater emphasis on local
and national businesses The Web site was
launched in July 2004 and used by 59%
of Australians with more than 5 million
visitors every month, according to a recent
Neilsen/NetRatings (Sensis, 2004a)
• Yellow Pages® — with more than 14 million
copies in circulation, the Yellow Pages®
print directories are found in virtually every
home and business in Australia
• White Pages® — print and online business
directories
• City Search® — Australia’s leading online
culture and lifestyle guide, offers tailored
Internet solutions
• Whereis® — Whereis® products and
ser-vices are the location (digital mapping) and
navigation brand of Sensis Search
• Sensis1234 — With sensis®1234, callers
FDQ¿QGDEXVLQHVV DQGUHVLGHQWLDOOLVWLQJV
through a single number, whether they know
the business name or not
• MediaSmart® — Provides consulting
services on the best sites and advertising
formats to reach your target market
• Trading Post® — a print and online private
DQGFODVVL¿HGDGYHUWLVHPHQWVGLUHFWRU\IRU
goods and services
• JustListed.com.au — a new commercial and
residential online real estate portal currently
based in Sydney, where its inventory includes
over 42,000 rental and sale properties and
1,670 real estate agents Due to the very successful performance of the portal, Sensis plans to develop it into a national, online real estate portal
As shown, Sensis Search (sensis.com.au) is
a key component of Sensis multiple dimensions
of business and plays a central hub role in the interfaces between online and print searches of information This chapter focuses on exploring the experiences of sensis.com.au and identifying key issues of its operation Data for this qualitative case study was collected mainly from two primary sources: (i) a documentary research into Sensis’ business reports, online newsletters, memos, DJHQGDVDQGRWKHURI¿FLDOSXEOLFDWLRQVDQG LL DQ
in-depth interview with a senior manager of sensis.
com.au The case study focuses on how Sensis has
been managed, how it has succeeded, and what lessons can be learned from its experience
SENSIS SEARCH: CREATING A NEW PARADIGM FOR INTERNET SEARCH IN AUSTRALIA
Sensis Pty Ltd launched its search engine Sen-sis Search (senSen-sis.com.au) in July 2004, which constitutes all the online/electronic portfolio of Sensis Pty Ltd including www.whitepages.com
au, www.yellowpages.com.au, www.whereis.com, and www.CitySearch.com.au (Sensis, 2004c) By doing so, Sensis Search is able to provide Aus-tralians with fully blended search results across local proprietary and global Internet content For H[DPSOH$XVWUDOLDQVFDQXVHVHQVLVFRPDXWR¿QG DORFDOÀRULVWDQ\ZKHUHLQ$XVWUDOLDDQGDOVRWR locate and purchase a pair of shoes in New York The search engine provides local, commercial, and global searches from which customers can get blended results from local Yellow Pages®, White Pages®, CitySearch®, and Whereis® data, com-bined with global Web content Sensis Search is WKH¿UVWPRYHULQUHGH¿QLQJWKH$XVWUDOLDQVHDUFK
Trang 8market and creates a new paradigm for Internet
searching that delivers relevant, quality local and
JOREDOUHVXOWV6HQVLV6HDUFKUHSUHVHQWVD³ZRUOG
¿UVW´¶DPRQJVHDUFKHQJLQHVDVLWLQWHJUDWHV,Q-ternet Web page content and structured content
HJWKH<HOORZ3DJHVGLUHFWRU\ LQWRD³RQHVWRS
shop” for searches, unlike other search engines
such as Google, where these services are available
but under different URLs As such, searches can
be performed locally, nationally, globally, and
throughout the Sensis sites The strategy to develop
synergies among Sensis’ businesses contributes to
the success of Sensis and Sensis Search The focus
on and pursuit of Sensis Search for relevant, local,
and quality return results herald the maturity of
online search services The success of the online
search is no longer measured by the volume or
the size of the Internet index but by the extent of
PHHWLQJVSHFL¿FXVHUV¶VHDUFKQHHGV0RUHRYHU
Sensis Search provides Australian users with
very easy access to commercial content through
,QWHUQHWDFFHVV&RPPHUFLDOFRQWHQWLVFODVVL¿HG
under nine categories: products, services, people,
SODFHVHYHQWVMREVFDUVKRXVHVDQG³FRQVXPHU
FODVVL¿HGV´ ZKLFK PLJKW LQFOXGH VHDUFKHV RI
Sensis directories such as the Trading Post
Due to the initial success of Sensis Search
in managing to provide the most innovative and
comprehensive online search engine in Australia,
Sensis management decided to expand the
busi-ness further In December 2004, Sensis acquired
one of Australia’s most successful mapping and
street directory businesses, Universal
Publish-HUV 3W\ /WG 7KH DFTXLVLWLRQ KDV VLJQL¿FDQWO\
strengthened the market share and position of
Sensis Search which now boasts the largest and
most up-to-date database of navigable mapping
content in Australia Unlike its competitors, as
one line of its business, Sensis Search provides
nearly 100% geographic coverage of Australia
DQG³LWVFRQWHQWVFRYHUVHYHU\WKLQJIURPXUEDQ
streets, to points of interest, four-wheel drive
tracks in the remote outback, and smaller roads
you’d never see on a normal map” according to the CEO of Sensis Pty Ltd (Sensis, 2004a, p 1) This aggressive growth strategy of Sensis through acquisition aims to accommodate the increasing demand of Australia’s local consumers for lo-FDOLVHGDGYHUWLVLQJDQGPDSEDVHGVHDUFKWR¿QG local businesses, products, and services Sensis Search’s digital mapping business now serves more than 18 million digital maps online every month through its Whereis® brand on the www sensis.com.au site (Sensis, 2004a)
7RVXUYLYHDQGVXFFHHGLQWRGD\¶V¿HUFHFRPSH-tition in the search engine industry, Sensis Search pursues two complementary lines of businesses
— online advertising and online search The market share of Sensis Search online ing has now exceeded 23% of online advertis-ing in Australia, and, meanwhile, it has seized approximately 70% of the combined search and directories market in Australia (Sensis, 2004b) According to the Online Advertising Expenditure 5HSRUWLVVXHGE\WKH$XGLW%XUHDXRI9HUL¿FDWLRQ Services, the revenues from online advertising grew by 58% to AU$300 million in the 2003/2004
¿QDQFLDO\HDULQ$XVWUDOLD7KHVWHOODUJURZWKLQ online advertising is both an opportunity and a challenge to Sensis Search The company devel-ops its corporate strategy and direction focusing
on local online search within Australia, thus becoming the major player in local Australia’s search through providing relevant and complete localised business information The success in providing relevant and quality search results to PHHWVSHFL¿FXVHUVHDUFKHVKHOSVERRVWWKHRQOLQH advertising business of Sensis Search as well as the entire business of Sensis Pty Ltd
Sensis Search, the online/electronic portfolio
of Sensis Pty Ltd, recorded a 40.7% growth for the year 2004 and 34% online usage growth for the same year (Sensis, 2004b), while Sensis’ print business only grew by 5.6% compared with the SUHYLRXV¿QDQFLDO\HDU 6HQVLVG
Trang 9KEY LESSONS LEARNED
Sensis Search’s experience presents several
fun-damental management lessons for the business
operations and development of today’s dot-coms
and e-businesses This section examines and
explores these lessons
First, the success of Sensis Search is one of
combined innovation and entrepreneurship in
the e-business world (thus called e-innovation and
e-entrepreneurship) Today’s e-business operates
in a highly competitive marketplace where
sustain-able competitive advantage is almost impossible
as there are minimal barriers to new entrants and
competitors in the marketplace Innovation faces
constant challenges of imitation and erosion
There have been different views in the literature
DERXWWKHEHQH¿WVRI¿UVWPRYHUVLQWKHHEXVLQHVV
marketplace Mellahi and Johnson (2000) asked
WKHTXHVWLRQ³'RHVLWSD\WREH¿UVWWRPDUNHWRU
VKRXOGHFRPPHUFH¿UPVZDLWIRU¿UVWPRYHUV
to make an investment and then cannibalize the
idea with lower entry cost?” The cause of the
concerns are raised by a general belief that it is
VDIHUDQGOHVVH[SHQVLYHWRLPLWDWHWKH¿UVWPRYHU
in the e-business environment, where there is a
higher level of technical uncertainties and rapid
rate of technological innovation For instance,
many new dot-coms rushed to build an
e-market-place and chose imitation as a business strategy
rather than innovation This author argues that
it is the lack of a combination of innovation and
entrepreneurship capacity that has caused the
demise of many imitators in the dot-com industry
The essence of innovation and entrepreneurship
is taking a new idea to market, not imitating a
new idea without taking into account the special
needs of local markets, and being innovatively
and proactively responsive to environmental
changes by introducing a new product, process,
service, or implementing a distinctive business
model Sense Search’s success has clearly been
FRQWULEXWHGE\WKH¿UVWPRYHUDGYDQWDJH EHLQJ
WKH¿UVWFRPSDQ\LQWKHZRUOGWKDWWRRNLWVGLUHF-tory products online)
Both empirical and theoretical studies show that innovation interacts with entrepreneurship to achieve business success (Zhao, 2005; Kanungo, 1999; Drucker, 1994) The key elements of entre-preneurship include risk-taking, proactivity, and innovation (Miller, 1983) However, Slevin and Covin (1990, p 43) have argued that the three ele-PHQWVDUHQRWVXI¿FLHQWWRHQVXUHRUJDQLVDWLRQDO VXFFHVV7KH\PDLQWDLQHGWKDW³DVXFFHVVIXO¿UP not only engages in entrepreneurial managerial behaviour, but also has the appropriate culture and organisational structure to support such behaviour.” Thus, there is clearly overlapping and interdependence between entrepreneurship DQGLQQRYDWLRQ%RWKDUHQHHGHGIRU¿UPVWREH successful and sustainable Furthermore, entre-preneurship is related to the development of new products and services Innovation is sometimes not necessarily related to new products but concerns doing something differently and better While entrepreneurship is related to working with new products and services, it is not necessarily about doing things better Innovation, however, is about doing something better by doing it differently As VXFKHQWUHSUHQHXUVKLSFDUULHVH[WUD¿QDQFLDODQG risk issues because of the newness of the venture According to the experience of the company’s senior manager interviewed for the study, there are no conceptual and/or practical differences in terms of online and off-line entrepreneurship and innovation The approach is the same, regardless
of the online or off-line environment, although the skill set required is obviously different The company believes that entrepreneurship and in-novation are crucial to their success and innova-tion should be inculcated into the organisainnova-tional culture and is developed internally It includes encouraging staff to interact with customers and undertake research and development Sensis Search is not only an entrepreneurial company in terms of its aggressive growth strategy but also a
Trang 10pioneer of innovation Sensis has claimed to be
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seven factors which it believes drive innovation
and which it has subsequently applied to all new
product areas:
1 Clear vision communicated throughout the
company
2 Development of a culture of innovation
— through rewarding people and taking
calculated risks
3 An organic organisational structure — rather
than having a central group of IT managers,
producers, and product managers, each
prod-uct unit employs their own staff with their
own responsibilities and P&L statements
4 Job role clarity
5 Accountability and responsibility
6 Clear key performance indicators
(KPIs)
6XI¿FLHQWIXQGLQJUHDOLVWLFUHYHQXHH[SHFWD-tions, and people positively motivated
The entrepreneurship strategy that Sensis Pty
has taken is actually that of an intrapreneurship,
that is, entrepreneurship within an organization
Sensis’ story indicates that development of
entre-preneurship and innovation should be dependent
on the size of the company For instance, the Sensis
group includes large, established companies such
as Yellow Pages®, and the much younger and
relatively smaller Sensis Search Yellow Pages®
is built on an established, traditional business
model, while the Sensis Search approach is entirely
different As such, there is a need to separate
the companies and to allow new business units
ZLWKLQ WKH JURXS WR ³TXDUDQWLQH VSDFH´ ZKHUH
they can grow (within set time frames), using
GLIIHUHQWSHRSOHZLWKGLIIHUHQWUHZDUGV¿QDQFHV
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old models
Second, Sensis Search can be viewed as a
suc-cessful start-up of a new generation of dot-coms
which are more mature in terms of business models and information technologies, focusing more on MXVWL¿FDWLRQDQGDFFRXQWDELOLW\RIEXVLQHVVSUR-FHVVHVDQGRXWFRPHVWKDQRQD³FDQGR´PHQWDOLW\ only The post-2000 e-business successes gener-DOO\WHQGHGWREHWKRVHWKDWZHUH¿UVWWRPDUNHW DQGZKLFKZHUHVXI¿FLHQWO\IXQGHGWRZHDWKHUWKH crash These companies also managed to main-WDLQWKHLUSHRSOHDQGVWD\VXI¿FLHQWO\IRFXVHGRQ their core strategies, rather than diversifying too greatly Therefore, they have distinctive features from their counterparts in the earlier days of e-commerce In hindsight, e-commerce failures WHQGHG WR EH WKH ³Me2” brands (see Endnote), which were merely copying existing, successful HFRPPHUFHPRGHOVXQGHUWKHSUHPLVHRI³EXLOG
it and customers will come,” wholly failing to recognise the power of established branding Sensis Search is Australian-based but com-petes against global giants such as Microsoft,
<DKRRDQG*RRJOH$VVXFKWKH\KDYHLGHQWL¿HG two ways by which they can be competitive The
¿UVWLVE\SURYLGLQJDKLJKHUDPRXQWRIEXVLQHVV and commercial content, and the second is by having good relationships with global partners in RUGHUWRGHOLYHUWKHLUVROXWLRQVLQWKHPRVWHI¿FLHQW and cost-effective manner For instance, Sensis Search has partnered with Fast, a Norwegian company specialising in algorithmic search tech-nology which powers the Sensis Search engine
It has continued to achieve strong growth and to develop leading edge online search solutions for Australians It offers its advertisers the opportu-nity to put their companies’ existing print content online at little or no additional cost For example, businesses do not need to have a Web site to be found on sensis.com.au but simply be listed on the Sensis’ Yellow Pages® online site
7KLUGVXFFHVVIXOGRWFRPVUHTXLUHVXI¿FLHQW funds and people skills, as well as adherence to the seven-step innovation model Sensis Pty has PDGH VLJQL¿FDQW LQYHVWPHQW LQ GHYHORSLQJ LWV online/electronic dimension of its business as a long-term corporate strategy Generally
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can be learned from its experience
INTRODUCTION
In 2002, Sensis Pty Ltd was launched as a new
corporate brand and company