This means that our jobs are more secure, our impact stronger, the focus on growth is back and our capacity for innovation has been strengthened. All this is good news for both our employees and the millions of people who use and enjoy our products every day, whether they read the news or use our online classifieds. It is also good news for our owners. Leading market positions and good profitability combined with the capacity and will for innovation has created a solid rate of return on the Schibsted share in 2010.
Stronger pillars
Our two strategic pillars are media houses and online classifieds. In 2010 these two areas were given a considerable boost: in the autumn of 2010 Schibsted succeeded in gaining full control of Leboncoin.fr, a French website in which Schibsted was involved in launching in 2006 and which was based on the successful Swedish Blocket concept. In the course of these years Leboncoin has managed to establish itself as one of the leading websites in France. It is the third-largest online classifieds and auction websites in the whole of Europe. Having full control provides us with greater opportunities to capitalize on this fantastic market position to develop both Leboncoin and new online businesses in the vast French market. Of all the Blocket companies Schibsted has established, Leboncoin is our star performer to date. Full control of the company was therefore a high priority at Schibsted.
In 2010 Schibsted Classified Media intensified its efforts on establishing the Blocket model in other countries. We see that some of the launches we carried out in recent years are now making significant headway, for example in Italy and Portugal. Successes like these confirm our belief that this is an area in which we excel and where we have the capacity to gain leading positions. We will keep our promise to remain disciplined in terms of where we invest efforts and capital. Nevertheless, we believe that the time has come to push a little harder on the gas and launch more Blocket websites around the world. Modern marketplaces like these make everyday life easier for most people and lend themselves to reuse. We know that these are factors that are valued.
We are also committed to strengthening the media house pillar. We have invested considerable resources into completing the merger with Media Norge. This is a core business for Schibsted, and we have great faith in the future of the solid media houses and Finn.no. We believe that such a merger will strengthen both companies in a time when radical changes are taking place in our industry, and at a faster rate than ever before.
Rapid changes
Some of these changes were already apparent in 2010. The year was characterized by increased and more widespread use of smart phones and tablet computers. The online newspapers have experienced a dramatic growth in traffic volumes for their mobile services, and many of the Group's brands were launched on iPad.
We also see that the negative trend in circulation figures for single-copy newspapers continues. The traditional revenue model for newspapers is under considerable pressure, currently most notably on VG and Aftonbladet. This gives cause for concern, particularly so because these newspapers are among the media whose news stories often set the agenda for public debate. Looking on the bright side, however, when we include mobile, online and tablet computers, the same media houses have never been used by so many people on a daily basis as they are now. To be able to finance quality journalism in the future it will therefore be important to find ways of charging users for receiving news services on digital platforms. The development of models to this end has high priority at Schibsted.
Together in Stockholm
At the beginning of the year the Swedish operations were co-located in Stockholm city centre. As is the case for the Norwegian media houses in Media Norge, we have also focused on co-location projects in Sweden. In the light of circulation trends and the transition from printed to digital products, this is an absolutely necessary measure, and it helps to free up resources so that the media houses can work more effectively and improve the quality of their products. Even though the classifieds market is improving, we must continue to focus on a moderate operating strategy and good profitability – this will be the best way of securing the future of our media houses and jobs.
So far the reaction from the employees after the collocation project in Stockholm has been positive. I am delighted to note that it is emphasized that the move has facilitated better contact between colleagues in other Schibsted companies. That is a desirable development.
Cooperation the key
Learning from each other is namely a key concept for the way in which the Schibsted Media Group should continue to improve. We place a lot of emphasis on organizational development and competence-building. This is absolutely vital for a knowledge enterprise like ours. Continuous improvement and induction in The Schibsted Way provide us with good guidelines for how our companies should be run in order to maintain their leading positions.
We know that our employees are our most vital resource. It is therefore very encouraging to see the solid performance delivered every day in the Schibsted companies. At the annual Schibsted Journalism Awards and the Schibsted Sales Awards we highlight and celebrate accomplishments that impress us all, at the same time as we take the opportunity to be inspired and learn from the best our companies have to offer. I am convinced that the will which our companies demonstrate to share knowledge will contribute to more innovation and stronger competitiveness.
We face a year in which rapid technology development will undoubtedly continue. Everything we accomplished in 2010 stands us in good stead to meet those challenges with strength and optimism.
Rolv Erik Ryssdal
President and CEO