How much money does it cost to buy a Dallas Yellow Pages company?

October 9, 2009

How much “in non financial but common sense terms” does it cost to buy a print and online Yellow Pages publishing company? Just a bit more than $600,000,000.00 in my opinion. Based on my prediction, the weather, common sense, and a hunch that’s what I think.

Dallas area publisher Idearc Media who prints the Verizon Yellow Pages, and fellow yellow pages “industry coparties” at R.H. Donnelley Publishing are bankrupt. After being spun off of Verizon, Idearc, (the former Verizon Yellow Pages companies) stock began to fail due to earnings, cashflow, accusations of fraud, questionable sales tactics, a serious decline of print yellow page usage, and a heavy debt burden.

I also agree with Frank Reed and others feel the yellow pages need to be moved from booster seat to grave. Frank Reed said back in June of this year: http://www.marketingpilgrim.com/2009/06/major-yellow-page-publisher-files-chap-11.html

Most Internet marketers have been putting the Yellow Pages in the grave for quite some time now. The sales tactics and question of ROI is something that can no longer be swept under the rug in the age of the Internet and social media. While there is arguably a place for Yellow Page products they are no longer viewed as necessities to small businesses. Even the online versions of these offerings are wrought with confusion over their true value. Add to that the continuing murkiness of online yellow page “products” (i.e. buy x amount of clicks per month) and the future seems kind of cloudy as well.

back on topic……

I wonder if

Back Cover of Verizon Greater Dallas Yellow Pages

Back Cover of Verizon Greater Dallas Yellow Pages

would invest in the print and online yellow pages company? I know he does indeed receive many calls and decent ROI’s from the book. In my professional opinion it works great for Dallas Bail Bond Companies, Plano Personal Injury Attorney, blue collar Dallas Criminal Law Defense, Dallas Air Conditioning services, Pawn Shops, Loan places, Abortion providers, Mortgage Companies (risky loans), Pay Day Loans, odds and end type businesses (*surprises me that many of these headings do not have ads) and a Dallas Plumber here and there.

*best response & ROI ever from a print yellow page advertisement in my career: Local Dallas company that installed commercial shelving in Dallas…… said he was thrilled his competition failed “to see the value in advertising in the phone book”.

Oh, and btw I wanted to offer folks a local dallas area search marketing blogger’s tip: Abraham Lincoln once said: “A lawyer’s time and advice are his stock in trade” (used this quote for a client of mine recently). I think this quote should say, “http://www.dallasSEOguru.com”>A local search marketing guru’s time is worth his stock in trade.”


What do Idearc, FairPoint, and Hawaiian Telecom all have in common?

October 9, 2009

Here is an article that I have been biting my knuckles trying to keep quiet about.
WSJ Comments On Idearc Bankruptcy & Verizon Culpability : Natural Search Blog

Posted using ShareThis

I read this article via a former employee of Idearc, one the Search Engine Marketing Industries most respected SEO consultants and who many believe to the the foremost experts on Local Search Marketing in the World, Chris Smith. Chris was formerly head of Idearc’s Search Engine Marketing team on the fella that helped put Superpages.com on the first page of Google. Chris did a tremendous job in the early day’s of local search beating other Internet Yellow Page Sites, such as YellowPages.com and Local.com (competing with keyword rich domains in the space is a challenge)

So the question is…. what do Idearc Media, FairPoint, and Hawaiian Telecom all have in common? They are all companies that Verizon spun off to fund Wireless and Fiber/TV/FIOS initiatives. Chris states, “Verizon might have some responsibility for the bankruptcies of Idearc, Hawaiian Telecom and FairPoint Communications”.

He also states:

In the case of Idearc, the business unit was too small to cause the great corporate mother ship to founder, and it’s the Verizon spin-off debt load it was saddled with that caused it to be unable to function in the first place. He misses the point that Verizon took too much money out of the spinoff deals. Those weren’t existing debts associated with those business units prior to their divestment.

These companies wouldn’t have “gone under” within Verizon. It’s possible that if a business unit starts to lose money for a quarter or two, the board would naturally require it to correct itself in some way.

I completely agree. I also think that the folks that worked for Ivan at Idearc at the time were over eager to accept whatever deal they could in order to be relieved of the burden of being under the Verizon direction. I don’t think it was smart of Kathy Harless and her team to take on such a debt burden…… seriously, over $9,000,000,000.00 for a company that has been losing its business to Google and Yellowbook and other competitors since 2001? It must have felt very confident on new product ideas such as Solutions at Home, Solutions Direct Mail, and Solutions on the Move! Nonetheless, the company would have never been able to create these new ideas and products under Verizon. Verizon used the Yellow Pages division as a cash cow to fund other ventures, then did it again when it unloaded debt on the smaller divisions.

I have a site that I am going to build: http://www.YellowCrooks.com, as I recently purchased the domain thanks to the idea from a former co-worker. He gave me the idea while being forced to watch an hour long rediculous “cocksure” video about sales, sales, and more sales. In my opinion sales was not the issue. The product offer and fulfillment was the major problem. (I have the credentials to state this since I was regarded as the most knowledgeable internet media consultant in the company {hey a FIGJAM moment for myself} and also have 3 President’s Awards for “Sales” in my 6.5 years in the division.) With the site I want folks to discuss what Verizon did. With all the transparency about Countrywide Mortgage and other recent events…. .why not?

Chris continues to state:

But, arguably these companies experienced a much higher degree of financial problems due to the extremely high debt they were required to service subsequent to spinoff. These spinoffs funded Verizon’s FiOS expansion — a gigantic project that was paid for by Verizon offloading the investment costs to the companies it spunoff.

It will be interesting to see if the Securities and Exchange Commission gives Verizon a pass on their spinoffs of bankrupt companies as Newmark seems to think reasonable, or if they don’t respond in some way to consumer and state government complaints.

In my opinion his comments are exactly why Idearc will have issues completing the bankruptcy. If I recall the company is going to come out with approx. 3 billion in debt when it emerges in Dec09/Jan10.

According to WebWire Press Release:

Idearc filed for voluntary chapter 11 bankruptcy in order to renegotiate its debt. Although Idearc was not technically bankrupt with over $500 million cash in the bank and net cash flow of $300 million per year, the weak economy spurred creditors into lowering the outstanding debt from $9 billion down to $3 billion along with more flexible payment terms. One of the terms is that Idearc give anything over $150 million in their bank account to creditors in order to pay down the $3 billion in debt. Essentially, Idearc will always have $150 million in the bank and anything over that will be taken out to pay down debt. Idearc’s 3 billion dollar debt has a note rate of 12%, the annual debt service is $360 million dollars, about 12.1% of 2008 gross annual revenue. The creditors/lenders have already approved the reduction in debt. The company is now waiting for approval from its board and the bankruptcy judge. According to the new deal, Idearc must give the creditors $250 million from its cash reserves as a sign of good faith. This will put Idearc’s cash position at approximately $250 million after the deal is completed

I hope the folks at the Downtown Courthouse in Dallas are taking all this into account! I know the counsel for the unsecured creditors is sure going to put pressure on fiduciary responsibility of Verizon. But in my opinion (or should I say prediction is) Verizon will probably buy Idearc back in some Bernie Madoff type crony deal and leave shareholders with pocket lint. Why? Because this is America! Heck, Verizon offered a separations package to folks that left the company and put it in writing that folks would not be hired back, yet these folks were later rehired after taking the Voluntary Separation Package with very nice severance packages. Do I blame the cocksure guy from Pepsi? Nope! Not for the burden. But it kinda makes me think of folks saying that Obama is not to blame for Bush’s choices. Well….. that might not be a good example…. or might just be?? Obama’s choice to put my kids in debt with the “Spendulus Plan” and Bail Outs might compare to turning “America’s local ad agencies” into a telemarketing service or abandon the internet business in favor of trying to keep the print alive. Honestly I have heard rumors (like I said!!! RUMOR!!!) about Idearc not wanting to stick with the .com product it offers since all it can muster is riding the coattails of Google and Yahoo in search. Margins in print make it easy to have 3000 “sales” reps. The smaller margins in .com might move the company towards that of a Media Buying Ad Agency and the company might follow in Google’s self automated pricing structure. Why should prices of ads be so darn “negotiable”?

I’d go a bit further and also agree with Chris and state “that if it looks like a rat and smells like a rat, it’s a rat”.

In the meantime….. y’all wish me luck….. I am hoping to start a company doing what I do best……

HELPING DALLAS AREA BUSINESS OWNERS REACH THE TOP OF GOOGLE AND MAKE MONEY!

Oh, yeah…. I think I am going to offer to create PPC campaigns for FREE and not charge a management fee or have you sign a contract…. Might be the wave of the future. Call me for details. FREE Google PPC Campaigns are subject to me providing my SEO services. Although technically I am not in business… maybe I can show folks how profitable SEO can be!


ATT wants to stop printing white pages and What is going on with Superpages.com, YellowPages.com, and CitySearch Traffic? IYP’s on decline…..

October 9, 2009

IYP traffic is on decline due to Google Local Business Listings

IYP traffic is on decline due to Google Local Business Listings

Well…. doesn’t sound like things are not going well with print either when even AT&T is asking to stop printing phone books.

The company should save some coin by going to a Yellow Pages only product… hopefully they do make the change and they get rid of the free listings in the yellow pages at the same time.

In the meantime, we need to start asking serious questions about the research tactics of yellow pages. It is obvious that the companies have the yellow pages industry association and Dennis Fromholzer of CRM Associates ( a company that significantly benefits from industry research statistics ). If you have ever sat with an Idearc Media sales representative ask who CRM & Associates is. The company that provides the data to support yellow pages trends to sales reps. Definately the syndicated research that Verizon was begging for in its persuit of justice against Yellow Book years ago. I am still looking for the research that both parties spoke about. Meanwhile check out your phone book for the latest research dating back to 2003 from the yellow pages companies. Or you can just take a look at the actual information from your yellow pages representative. Just don’t expect to hear the truth. Just the common industry rhetoric about flooded basements. Wonder who keeps a phone book in the basement these days?


Obama won the Nobel Peace Prize in just 12 days of being in office!

October 9, 2009

According to the Nobel committee’s own web site, all nominations must be submitted by February 1 of the year awarded. This means Obama’s international accomplishments are based on him being president for twelve days! Twelve days!

I think after Gore, Carter, and now Obama, it is official…the Committee is a left leaning organization. Not that it’s bad to be left leaning. Although I lean towards non crony capitalism, I do see war as a “last resort choice”.

From the Associated Press:

The stunning choice made Obama the third sitting U.S. president to win the Nobel Peace Prize and shocked Nobel observers because Obama took office less than two weeks before the Feb. 1 nomination deadline. Obama’s name had been mentioned in speculation before the award but many Nobel watchers believed it was too early to award the president.

Speculation had focused on Zimbabwe’s Prime Minister Morgan Tsvangirai, a Colombian senator and a Chinese dissident, along with an Afghan woman’s rights activist.

The Nobel committee praised Obama’s creation of “a new climate in international politics” and said he had returned multilateral diplomacy and institutions like the U.N. to the center of the world stage. The plaudit appeared to be a slap at President George W. Bush from a committee that harshly criticized Obama’s predecessor for resorting to largely unilateral military action in the wake of the Sept. 11 terror attacks.

Rather than recognizing concrete achievement, the 2009 prize appeared intended to support initiatives that have yet to bear fruit: reducing the world stock of nuclear arms, easing American conflicts with Muslim nations and strengthening the U.S. role in combating climate change.

“Only very rarely has a person to the same extent as Obama captured the world’s attention and given its people hope for a better future,” Thorbjoern Jagland, chairman of the Nobel Committee said. “In the past year Obama has been a key person for important initiatives in the U.N. for nuclear disarmament and to set a completely new agenda for the Muslim world and East-West relations.”

He added that the committee endorsed “Obama’s appeal that ‘Now is the time for all of us to take our share of responsibility for a global response to global challenges.'”

President Theodore Roosevelt won the award in 1906 and President Woodrow Wilson won in 1919.

The committee chairman said after awarding the 2002 prize to former Democratic President Jimmy Carter, for his mediation in international conflicts, that it should be seen as a “kick in the leg” to the Bush administration’s hard line in the buildup to the Iraq war.

Five years later, the committee honored Bush’s adversary in the 2000 presidential election, Al Gore, for his campaign to raise awareness about global warming.

The Nobel committee received a record 205 nominations for this year’s prize though it was not immediately apparent who nominated Obama.

“The exciting and important thing about this prize is that it’s given too someone … who has the power to contribute to peace,” Norwegian Prime Minister Jens Stoltenberg said.