By Stuart Condie

SYDNEY--Domain Chief Executive Jason Pellegrino will leave the Australian property advertiser following a transition period during which the company said it will decide what it wants from a new boss.

Australia's No. 2 real-estate advertiser by market share and market capitalization announced the change Wednesday without giving a reason.

Domain has struggled under successive CEOs to take market and revenue share from News Corp-controlled REA Group. News Corp. owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.

Domain said that Pellegrino will continue as CEO and managing director for between three and six months.

"This staged and orderly exit will allow the board to assess its requirements and evaluate candidates to lead the company going forward," Domain said.

Pellegrino said that a robust Australian property market and Domain's strong financial position meant it was an appropriate time to initiate change. Domain's annual profit rose more than 60% in its most recent fiscal year.

A leadership change is unsurprising given that Domain lost market share to REA over the past two years, Citi analyst Siraj Ahmed said. One of the few analysts currently bullish on Domain, Ahmed also noted Pellegrino's long tenure.

Pellegrino has been CEO since 2018, the year after Domain was spun out of Australian publisher Fairfax and listed on the Australian Securities Exchange. Fairfax later merged with ASX-listed media conglomerate Nine Entertainment, which retains a controlling stake in Domain.

Under Pellegrino, Domain focused on a so-called marketplace strategy in an effort to expand its addressable market into areas such as agent and lending services. Citi's Ahmed said Domain could better leverage Nine's broader audience to drive further growth.

Domain's revenue rose by almost 50% over four years through fiscal 2024, but analysts and investors have broadly favored REA for its larger size and faster growth. While REA shares have more than doubled in value since the start of 2020, Domain's share price has fallen 16% over the same period.

Last month, Domain's stock lost its coveted spot on Australia's S&P/ASX 200 benchmark index, losing valuable exposure to both retail and institutional investors.

Analysts have cited REA's increased scale and the legacy of its first-mover advantage among the reasons for its continued ascendancy. Domain was founded by Fairfax in 1999, four years after REA started.

REA's recent share-price surge has made it Australia's 18th largest listed company with a market capitalization of about 30 billion Australian dollars, equivalent to about US$20 billion. That makes it 15 times larger than Domain.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

October 22, 2024 19:34 ET (23:34 GMT)

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