When Jon Macdonald joined Trade Me in 2003 it had 15 staff sitting two to a desk in a shared office but it already had the online auction market pretty much sewn up and the calm technologist knew that it was heading for something big.

Just how big will be confirmed next month, when Fairfax will sell a 34 per cent chunk of the business through a share offer that will see Trade Me float on the NZX valued at $1.07 billion.

The share offer will provide the second mini-bonanza for Trade Me staff and executives in five years. Its 200 staff will each receive $999 worth of free shares and the company's 25 senior executives will between them get a bonus of $687,000 in shares if they stay and the company hits its 2012 earnings target.

"That's around good governance and making sure our senior management team's financial interests were aligned with our shareholders," says Macdonald, now Trade Me's chief executive. He won't say how the incentive compares with a "generous" secret bonus staff received from founder Sam Morgan when he sold Trade Me to Fairfax for $700 million in 2006.

For private investors, Trade Me offers the prospect of a solid return from a stable business at a time of low interest rates. At their issue price of $2.70, Trade Me forecasts shares will deliver a gross dividend yield of 7.1 per cent in the 2012 calendar year. What is most likely to weigh on the minds of investors is that Trade Me's dizzying growth may be behind it and that with less prospect of capital gains, its shares may be no auction-style bargain.

Trade Me has diversified from online auctions and is now the number one or two player in online advertising categories such as cars, real estate, travel bookings, recruitment and dating, but Macdonald says there is still mopping up to do, as well as a big opportunity to help larger retailers sell new goods online.

A category it has yet to touch is digital downloads of music, movies and "apps" for smartphones. Macdonald says that might lend itself to partnering with an established business.

Trade Me has also so far only dipped its toes into helping businesses advertise services online. Macdonald is lukewarm on Trade Me tackling Yellow Pages or NZ Post's Localist head-on by moving into the print directories business. "It is not something I'd bet the house on."

He says some growth will come from better broadband and the smartphone revolution, which will make it possible for members to trade more frequently, generating more commissions for the company. Auctions end at a fixed time and previously that meant that if people were out and about, they couldn't engage in a bidding war. Macdonald says that is changing with the greater take-up of mobile devices such as iPhones and iPads.

An ever-present risk is a cyber attack that knocks Trade Me offline or results in a breach of privacy. Either could undermine confidence in its trading platform.

He is reluctant to single out any one threat to the business, but says Trade Me's forecasts are based on the expectation of a continuing slow and hesitant economic recovery.

In terms of "more significant risks", Macdonald is keeping a wary eye on competition from overseas online stores.

The possibility of disruptive technological change coming out of the blue may keep investors awake at night. Macdonald acknowledges Trade Me has gone from being a "disrupter" itself to an incumbent, but says that if it does a good job, most threats should also be opportunities.

As an example, Trade Me's Cable St head office is now sporting a flatscreen television gifted to it by a "friendly manufacturer" that is keen for Trade Me to start thinking about developing apps for TVs.

"The benefit for us is you have got your feet up in the evening and something pops up on screen to remind you that an auction on your watchlist closes in 10 minutes.

"Things like that provide a real opportunity. If we don't capitalise on them, they are risks that provide new opportunities to potential competitors."

Show Me The Money



$363.5 million - the amount of money Fairfax plans to raise from selling a 34 per cent stake in Trade Me.



1.6 million - the number of general items listed for sale on Trade Me.



1.1 million - the number of people who have bought or sold something on Trade Me in the past year.



68 per cent - the proportion of people who have access to broadband at home.



40 per cent - the proportion of general items sold through Trade Me that are new rather than second-hand.



350,000 - how many people have created profiles on Trade Me's dating site Find Someone, of which 45,000 are active members.



238,000 - the number of general items listed for sale on Trade Me each day.



37,000 - the average number of general items bought through Trade Me each day.