Someone recently made a comment to me that sorta bugged me, Bill Brewer, my one week former RVP at SuperMedia, was reported to have said that I am a former disgruntled “fat guy sitting on his couch blogging about the company while eating Cheetos.”
Hey Bill, I am actually in bed at 3:00 a.m. thinking about a meeting for tomorrow and reading a few Google Alerts.
Now that that is out of the way, let’s discuss how Yellow Page companies fraud old and new investors.
Investors of Idearc Media, like JP Morgan Chase, were not fortunate to have assets secured for the Verizon Yellow Pages brand. When the company declared bankruptcy creditors had virtually little assets to pursue or liquidate. The manner of which SuperMedia uses the Verizon brand, an asset, was not something creditors could liquidate to recover compensation from the bad investment. This was something that worked out well for the company and was initially discovered during the bankruptcy pre-planning wheeling and dealing that took place. (Honestly, Idearc was worth very little based on this fact.) Some of the bondholders ended up with a stake in the new company. In my opinion this is a terrible asset if these new creditors again did not secure the brand as an asset, which it likely did not since the value of the brand is more Verizon and not so much a super advertising media and more of a dinosaur method of providing referrals. Lol. Considering the company is just a few more years worth of double digit declines from being bankrupt a second time, it really is not worth much more than the employees and processes.
What investors don’t know is that (IMO) SuperMedia CEO Scott Klein directed sales managers to report cancellations on “good accounts” only to put these customers back in as new revenue to report to investors after bankruptcy. This is fraud. Unless employees take the honest path and report this activity, I am sure the company just might get away with fraud again. SuperMedia is also rumored to be reporting non paying clients in the RDS sales channel who are not paying (no pays is essentially a collections problem) for ads as sales fraud, another way to manipulate investors. It is not sales fraud. It is an attempt at hiding losses, SEC fraud, and further proof of the existance of a failing commission sales model that is the real problem at SuperMedia.
How mujch money did Dave Bethea’s next door neighbor and new Texas Division Sales Manager Lane Siddall make on Idearc stock during the companies “quiet time.” I hear the SEC wants to investigate these “rumors.”
Regardless of whether in, out, or during bankruptcy, SuperMedia has a leadership team committed to doing whatever it can to pump up the companies earnings (and hit a nice payday lick at to boot.) That is what happens when a crony CEO surrounds himself with an old executive team familiar with the companies revenue reporting tricks, the same tricks Ivan at Verizon got sick and tired of by Kathy Harless. Scott Klein just took it to an entirely new level of corruption and greed.
I challenge investors to ask Dee Jones and Scott Klein how much of the latest revenue growth results came from previously cancelled accounts that were reinstated and/or put on a new customer ID?
I also challenge employees to discuss my allegations that Idearc / SuperMedia is manipulating reporting by simply reporting collections challenges as fraud. Rumor is that this is the second time for such a scam, the first time was when they sued a 3rd Party Telemarketing firm for committing the same sales fraud that many reps (particularly the “Spanish Speaking Division Reps in Texas”) have been doing for years (all the while getting paid higher commissions.) They claimed more fraud in the lawsuit with the 3rd Party Telemarketing firm than what actually took place.
Spanish Yellow Pages sales fraud begins at a “day labor center” with an illegal immigrant and a cellphone number. According to former representatives, this activity is something that managers know is going on, including SuperMedia CEO Scott Klein, they just look the other way and ignore what is obvious and will like?y use a similiar excuse as Jeremy the CEO of Yelp.com does when accused of extortion by businesses. CEOs can state all day long to media that they are clueless to the degree of fraud and are not held accountable for the actions of sales consultanrs. I warn investors to take a quick look at the revenue numbers to commission ratios of the Dallas area Spanish Verizon Yellow Pages books. The disproportion is due to fraud. Just because someone signs a contract does not mean it was an ethical business arrangement. Existing clients are impacted by sharing call volume with prepaid cell phones owned by illegals or sales reps.
I am anxious to see if these concerns are investigated. How much revenue will be reported as SuperMedia revenue that was really Idearc revenue cancelled before January 4th? SuperMedia will soon report first quarter 2010 revenues. Might be a goodtime to grab a bag of Cheetos and watch this train wreck of a company unravel on my couch. Maybe Bill Brewer was right? Better to be on the couch providing his former clients advertising for less than so called inflated “market cost” with low overhead and a service approach vs the product focus and trying to convince clients that campaign managers have a clue and/or the time and tools to do the job right the first time. Investors and advertisers need a SuperGuarantee that SuperMedia is not going to rip them off. Good luck getting that one in writing folks!
How about selling the identity bundles and click guarantees as “leads” vs calling them clicks just to make a buck, and management actually knows it is happening. Or avoiding credit policy by putting painters and handyman under non risky headings?
By the way Bill, one of your former clients paid $27.00 per click from Google for “Criminal Defense Attorney” keywords with no calls. Today, quite possibly thanks to my brains and couch, these click thrus only cost him around $11.00 each and he receives many calls …….go tell that to your SMLocal team buddy!
Now this begs the question: How do you manage your companies reputation online when the value proposition takes profit away from the client and into the companies treasury to give to executives, all the while providing a terrible ROI for most clients? Broken business model anyone? Every dollar a client pays into your mandatory SMLocal 85% burn rate requirement, regardless of converting the traffic into phone calls, is another future negative post about your company on RipOffReports.com.
To Bill Brewer, I may not have your big corporate salary anymore, but when I left Idearc I took my ethics with me….something you could learn a thing or two about.