SuperMedia and Dex Merge 2012

August 22, 2012

Dex One Corporation and SuperMedia Inc. today announced that their Boards of Directors have approved a definitive agreement under which Dex One and SuperMedia will combine in a stock-for-stock merger of equals, creating a national provider of social, local and mobile marketing solutions through direct relationships with local businesses.

Upon closing of the transaction, Dex One shareholders are expected to own approximately 60 percent and SuperMedia shareholders are expected to own approximately 40 percent of the combined company.

Two ugly companies with a dim future get married and make one big ugly company with an even uglier future.

Why? It was planned years ago from the getgo. It is no longer a rumor.

Idearc and RH Donnelley both were loaded with debt. Both companies went bankrupt. The Paulson Hedge Fund has a stake in both companies. Both companies experience naked short sellers attacking the value of the business and manipulating the stock price. So much in common it makes you think they are perfect for eachother.

Idearc (one of the leftover marketing names from the “Verizon” brand development research) was doomed from the day Ivan (CEO of Verizon) decided to spin the company off with 9 billion in debt, without the assets or collateral to back it up. Idearc’s incompetent management team has no loyalty to the hardworking people (and teachers union) who invested in Verizon blue chip stock and subsequently lost it in Idearc stock. But Hedgefunds like Henry Paulson shorted the company and them bought both Dex and SuperMedia stock after bankruptcy. It was perfectly timed 2 years after SEC rules of course. No IRS penalties for Ivan! Just a bunch of unhappy business owners who have a great reason to hate the yellow pages.

It is this sort of Crony capitalism that sparked the Tea Party Revolution… But we at Idearc remembered Scott Klein the CEO ranting about his love of the Hope And Change Chicago politicians. I prefer supporting small businesses like the ones I have helped for the last decade. They despise this marriage.

Come to think of it, maybe it would be good if they reduced the saturation distribution business altogether?

yellow pages future

When I left SuperMedia in 2009 they still had over 80 sales reps in the local Dallas sales office. Last I heard they are down to less than 10 reps. The company has lost over 22% of its business year over year.

This is a move to keep the stock above $1 per share and avoid being listed only on the over the counter “pink sheets.”

Real small business online marketing takes a less “protectionist” 12 month contract product centric focus and a more holistic transparent client-side strategy that focuses on “content marketing.”

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SuperMedia CEO Scott Klein Resigns Amongst Allegations of Fraud

October 5, 2010

Scott Klein SuperMedia CEO Resigns Amongt Allegations of FraudSuperMedia CEO Scott Klein “resigns” amongst allegations of fraud.

Recently, Verizon was sued by the Idearc bankruptcy trustee.  Questionable actions have led to the resignation of SuperMedia’s CEO Scott Klein. This is not the first time an executive from the company has resigned or been fired for questionable actions and activities. If you are a SuperMedia employee, just think, it can’t get any worse and the end on Scott Klein’s reign of terror on VIS/Idearc/SuperMedia is over.

Who is now in charge?

SuperMedia appoints Peter J. McDonald as interim CEO replacing Scott Klein. Douglas Wheat is chairman of the board. Scott Klein has officially “resigned.”

Hopefully they find someone who has experience in something other than takeovers, buyouts and commodity product sales.

Scott Klein’s absence may lead SuperMedia on a path to becoming “America’s Best Small to Medium-Sized Business Advertising Agency”, yet to do this they must approach the market with a holistic, service oriented, transparent product offering and embrace a subscription opt-in distribution model. My suggestion is to reduce the scope of the directories and take a magazine approach with incentives for advertisers. Incentives, not copied gimmicks such as the SuperGuarantee will give consumers what they want. If the company can incorporate the power of group buying, special offers, and distance themselves from a 12 month product life cycle they will succeed. This has potential to be a great step in the right direction for the company. Let’s see if the micro-management culture continues?

 

So, what about this new interim CEO?

Mr. McDonald has over 35 years’ experience in the yellow pages industry, most recently as President and Chief Operating Officer of RH Donnelley Corporation (now known as Dex One Corporation) from October 2004 to September 2008. He has previously held other senior roles in the industry, including Senior Vice President and President of Donnelley Media, President and Chief Executive Officer of SBC Directory Operations (now AT&T Directory Operations), President and Chief Executive Officer of Ameritech Publishing, President and Chief Executive Officer of Dontech Publishing, and General Manager of Donnelley Information Publishing. Mr. McDonald began his career at National Telephone Directories – one of the predecessor companies that are now SuperMedia – where he became Vice President and General Manager. Mr. McDonald has served on a number of boards, including those of RH Donnelly Corporation, CMGI Inc., and the Yellow Pages Publishers Association, where he served as Vice Chairman.

It is obvious that he will soon be working on the planned merger between DexOne and SuperMedia. Cost savings and the fact that the companies business models are so closely aligned, combined with the fact that the companies do not cross compete in most markets means that it is inevitable.

*edit* rumor is as of Nov. 17th Mike Pawlowski and David Bethea, the East and West EVP’s under Klein, are out starting 11/ 30/2010. They are being replaced by Dex people which would indicate that Supermedia management is being eliminated(any surprise?) in preparation for a merger with Dex.

When a monopolies are a goodthing, two crappy companies make one really crappy company… the DexOne/SuperMedia merger is necessary to cut expenses and both companies do not cross compete.