As expected, RH Donnelley filed for bankruptcy today to restructure it’s balance sheet and rid itself of $6.4 billion in debt and reduce annual interest payments by $500 million. The move by RHD follows Idearc’s bankruptcy filing announced in March — and positions both companies to “emerge” in a much healthier state.
This is truly a good news-bad news story for both companies — and indeed for the entire yellow pages industry.
The good news is that both Idearc and RHD will be stronger financially which gives them a real opportunity to innovate beyond their legacy print business models.
The bad news is that neither business has yet to demonstrate an ability to transition advertisers from offline to online and their current web offerings are tightly wrapped in traditional directory-centric thinking.
Let’s face it! The web is the directory — and no matter how you slice it, the act of search and discovery increasingly occurs everywhere but the printed phone book.
In order for Idearc and RHD to succeed, they must begin to understand that there is a huge difference between:
- business listings that are “on the web”
- business listings that are “of the web”
Being “on the web” is simply not enough. Small businesses require simple-to-use tools on top of platforms that are open, extensible, and conversational so they can connect and engage with prospects wherever they might be looking.
Not everyone gets a second chance. I hope Idearc and RHD are ready to take advantage. I hope they’re ready to innovate.
Matt -
Thanks for the post. I work for Idearc and we could not agree more about innovation. Please take a look at our SuperGuarantee on superpages.com and a new barter program on supertradeexchange.com. We believe we are on the right road.
Andrew — the super guarantee program is definitely a neat marketing program. Let me know if you’d like to see an innovative online software product for SMBs. I’d be happy to do a demo of our cloud profile platform which i think could be very complimentary to your other efforts.
BTW — for anyone not familiar, you can see the super guarantee below.
I spent 17 years in the Yellow Pages industry. Most of those years were spent selling yellow pages advertising, but many years were spent deploying CRM systems for what is now Dex Media, which is a subsidiary of RHD. I’ve been away for years now but the main problem for years was a disconnect in sales compensation for selling online services versus ads in the paper directory. Online started out as the bastard stepchild of the print medium. At first, separate sales organizations were set up to market these services. The old school Premise sales reps looked with disdain at these young punks who couldn’t walk into a greasy plumber’s shop and sell a full page ad if their lives depended on it. So the people who had the real relationships with the customers who spent the most money on yellow pages were not educated about the importance of the transition and were not compensated correctly to first sell online as a complement to paper, and then to transition completely.
I say let these dinosaurs die, just as we did with the buggy whip manufacturers. I’ve owned a successful small business for almost five years now. In the midst of this recession my sales are up 25% this year. I made a conscious decision two years ago to pull all of my advertising from Dex, Idearc, and Yellow Book. Instead I continually update my Google local business profile. I have a Facebook and Linkedin page. I twitter. I make extensive use of Constant Contact. I am developing a Ning social network. I’m doing all this in my spare time. Let me tell you what would be a killer new service for SMB’s — a resource to update all of these services on a daily basis for me. Someone who can mine my Quickbooks Customer Manager database, which contains accurate customer records that identify my customers by multiple important criteria.
Finally, stop beating up these dead old horses and start beating up Google and Microsoft. Years ago they should have swooped in and stolen the best premise yellow page reps to sell local online directory services to businesses like mine. They assume that a local small business is tech-savvy enough, or more importantly has the time to read their FAQs or troll through websites to understand the financial benefit these services can bring to their businesses. I consider myself to be a pretty smart guy, but I didn’t understand until a month ago that I could pay Google pennys a click to have a link to my site pop up anytime someone on a computer within a 10 mile radius of my business typed in “rush trophy order”. It took a twenty something kid I just hired to hit me over the side of the head with that brick.
Bottom line, there are billions in revenue waiting for the right company who is willing to marry the right technology to the right sales compensation program. This sales force must include 21st Century Tin Men who are paid six figures to walk into local businesses like plumbers, electricians, doctors, lawyers, tree service, landscapers, and all the other top yellow page headings. You also need a strong telephone and internet sales force that complements your premise force. This company should hire all the best yellow page sales people, retrain them, buy up ServiceMagic and Annies list, enter into a strategic relationship with Google, and go out and make a pile of cash.
I’m real busy selling trophies, plaques, medals, and promotional products right now but I might be enticed to help get a company like this off the ground. I can be reached at crownboulder@gmail.com. Happy Sunday!
Hi Gary:
Thanks for the brilliant comment. Fascinating on multiple levels. I’d love to show you our new product. I think you will find it fascinating!
True Local Search is the future. Yellowbook.com is the only IYP search engine that is a true local search. It also does not sell it’s soul to national companies for it’s local search. It’s simple to see the difference between Yellowbook.com and the other IYPs out there. When I meet with my customers, I have them do a search for Pizza in their hometown on Superpages and Yellowpages.com. They can’t find a local pizza shop on the first screen! They try Yellowbook.com and what comes up? Pizza shops local to their area. Superpages and Yellowpages.com can add all of the bells and whistles to their sites, but their searched are not truly local. They are DMA searches. Their search engines do not give the user what they want, quickly. Furthermore, phone numbers are conspicuously not listed on their results pages. You have to click through to the advertisers listing page. Users want a quick find and a phone number to call to solve a problem or buy a service/product. This isn’t rocket science folks. A true local search that provides enough info quickly for the user to make a buying decision is the key! You will see Yellowbook.com continue to increase it’s popularity online. By the way, the SuperGuarantee idea isn’t new. It’s a reincarnation of a similar program that existed years ago in the YP business. It failed, because it was a free-for-all by the consumer and competitors that put consumers up to complain. The publisher becomes the sole arbitor of disputes. Reputable business owners lost money and their reputation over a program that went wildly out of control. Yellowbook.com is the way of the future my friends.