The new site will combine Fairfax's real-world real estate advertising with the home and design content from the Domain lift-out in The Sydney Morning Herald and Melbourne's The Age each Thursday.

"We're using the same names and making the same products consistent and complementary to each other," F2 chief executive Nigel Dews said yesterday. "It's very much a partnership (between offline and online) with the existing supersites and it will remain that way with domain.com.au."

A natural question for a newspaper business shifting its classified advertising content online might be: how does it expect the new business not to eat into its offline income? Mr Dews said that Fairfax had not yet seen any cannibalisation of its printed classifieds. To avoid one medium eating away at another you had to make sure both were well stocked with the richest content, he said.

APT Strategies analysts believe brands created by established offline publishers will come to dominate the online classifieds market. "The ability of offline publishers to offer traditional print classifieds and the Internet version of a title in a branded package is a strong offer to advertisers".

He adds that with long experience and professional sales teams, the traditional publisher is well placed to protect revenue in print by harnessing the online classified brand.

So the likes of News Limited (publisher of The Australian), the Trading Post and Fairfax are well placed because advertising can be used simultaneously online and offline. "It's a grow and protect strategy," Mr Cranswick said.

But while the online classifieds market will continue to expand exponentially, revenue growth will be flat. "The Internet and classifieds are one sort of killer application and the facility to search for hard information works easily on the Internet," Mr Cranswick said.

"But just as the costs of Internet entry are low for an online media owner, the media value of advertising within an online classified Web site is also low."