Fairfax is doubling down on 'local' social networks

Fairfax media is diversifying by buying into social media companies. Cameron Spencer/Getty Images

Fairfax media has acquired 25% of “local social network” Nabo, joining major shareholders Seven West Media and the Westpac-backed Reinventure Group.

The concept allows the creation of a community social network, which can act as a noticeboard, or link community groups, such as a council and neighbourhood watch.

Fairfax had previously taken a 22.5% stake in New Zealand-based local social network, Neighbourly.

The two companies are similar to the US-based Nextdoor, which raised $150 million earlier this year.

When Business Insider tried Nextdoor it was useful to keep track of local news – like crime, but a suburb doesn’t provide the scale to organise events, playdates, or find services like a babysitter.

The move comes as fellow newspaper publisher News Corp is diversifying its revenue streams through a stake in an online tradie marketplace.

Launched in November 2014, Nabo operates in 5,800 Australian suburbs and has grown by 720% since January. Neighbourly in New Zealand recently hit 200,000 users, and claims 38% of people “regularly” used the app.

But Fairfax thinks local social networks are keeping with its history of connecting communities. And that together with its other products – such as newspapers, the companies could achieve greater scale.

“This is a compelling investment for Fairfax” said Allen Williams, Fairfax Media managing director of Australian Publishing Media

“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.”

“Nabo complements our investment in New Zealand’s leading local social network, Neighbourly, which has achieved tremendous growth by leveraging our large-scale audiences.”

“We believe Nabo has similar potential in the Australian market and we look forward to working closely with the team to strengthen its offering and achieve its full potential.”

Disclaimer: Business Insider is published by Allure Media, which is 100% owned by Fairfax Media.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.