RH Donnelley Buys Business.com for $350 Million

The image “http://www.rhd.com/images/home_menu_images_revised/corner_logo.jpg” cannot be displayed, because it contains errors.RH Donnelley has won an auction that included many of the high profile Internet brands. The purchase price was a $350 million “in cash and deferred purchase consideration.” According to the press release:

Through this transaction, R.H. Donnelley will add to its existing interactive portfolio a rapidly growing and profitable business-to-business company, with online properties that include Business.com, Work.com and the Business.com Advertising Network. These online brands attract an audience of highly qualified and motivated business decision makers. Business.com optimizes the revenues from these properties through the use of its Performance Based Advertising (PBA) platform, which is considered to be one of the most advanced systems in the marketplace

In addition, R.H. Donnelley’s Triple Play business-to-consumer integrated marketing solutions will also benefit from a significant infusion of leading-edge search and directory technology and interactive thought leadership from Business.com, particularly in the areas of performance based advertising technologies and corresponding ad network capabilities.

Business.com employs approximately 100 highly-skilled technologists, strategists and businesspeople and serves more than 6,000 business-to-business advertisers and their agencies. The company is profitable and is expected to generate revenues of greater than $50 million in 2007. It is widely recognized as a leader in the online business-to-business commercial search space and has been named to the “Inc. 500″ and BtoB magazine’s “Media Power 50″.

This is quite a bit different than when AT&T (then BellSouth and SBC) paid an estimated $100 million for YellowPages.com. Why? The company arguably bought the URL/brand “yellow pages” and then rebuilt everything from the ground up.

RH Donnelley is buying a profitable set of online properties that it won’t need to rebuild and diversifying its online investments. Indeed, this is much more like the NY Times buying About.com — a non-core asset that will contribute to the bottom line and help the company broaden its (advertiser) appeal. It also acquires some technology that will help the yellow pages property too. As an “ad network,” Business.com is ranked in the top 50 (35) according to comScore (click to enlarge):

comscore

The release also says that Business.com CEO Jake Winebaum will become the new head of RH Donnelley’s Internet unit “RHDi”:

Winebaum will be appointed as President of R.H. Donnelley’s interactive unit (RHDi), which will now include DexKnows.com, LocalLaunch! search engine marketing company, Business.com, Work.com and the Business.com Advertising Network. Winebaum will lead RHDi from Santa Monica, Calif., and will report directly to Swanson.

This acquisition won’t immediately help the competitive position of DexKnows.com vis-à-vis consumer traffic and usage. However, over time, the learning and technology from the acquisition – as well as the addition of Winebaum – could be significant. Donnelley will need to make life interesting enough for Winebaum to retain him of course (beyond the initial contract period).

Regardless investors and investment firms will like the acquisition because it represents a strategic shift for the company that indicates a serious interest in growing online revenues in a diversified way.

Here is the Q2 earnings announcement that includes mention of the acquisition.

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Related: Here’s the WSJ (sub req’d) piece on the acquisition. Here’s a Kara Swisher interview (plus video) interview with Jake Winebaum, CEO of Business.com.

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12 Responses to “RH Donnelley Buys Business.com for $350 Million”

  1. RHD acquires Business.com » eWhisper.net Says:

    [...] Greg Sterling’s writeup Powered by Gregarious (42) Share This Possibly Related Posts: Overture acquires FastOverture acquires Alta VistaYahoo acquires WhereOnEarthR.H. Donnelley acquires LocalLaunchYahoo acquires Upcoming.org [...]

  2. R.H. Donnelley to Acquire Business.com - Social Media, Search Engines, Website Marketing Says:

    [...] Sold To RH Donnelley; Beating DJ, NYT and News Corp RH Donnelley Buys Business.com for $350 Million Business.com acquired for $345 million Business.com Sells for $350 Million Business.com Sold for [...]

  3. Population Statistic Says:

    BUSINESS.COM’S FULL VALUE, REALIZED

    Defying what I consider to be common sense, phonebook publisher R.H. Donnelley bought Business.com for $350 million in cash, in an optimistically synergistic strategic move.
    I guess I’m just too stingy to be a wheeling-dealing Web tycoon.
    Maybe I…

  4. No Acquisitions Today — Hopefully « Screenwerk Says:

    [...] morning started with the RH Donnelley announcement that it was acquiring Business.com (more on that later) and the day ended for me with the Microsoft announcement about AdECN (amount [...]

  5. RH Donnelley buying Top Internet Advertising Network Says:

    [...] directory and pay-per-click advertising network ranked in the top 50 (35) according to comScore. Greg Sterling reports that investors and investment firms will like the acquisition because it represents a [...]

  6. HELM, WHM/cPanel, Windows, Linux and SEO Blog » Blog Archive » Call Genie and R.H. Donnelley Launch Local Voice Search Says:

    [...] pages publisher R.H. Donnelley (RHD), which recently acquired Business.com and owns search marketing firm LocalLaunch, is testing a new voice local mobile search product, [...]

  7. HELM, WHM/cPanel, Windows, Linux and SEO Blog » Blog Archive » CallGenie and R.H. Donnelley Launch Local Voice Search Says:

    [...] pages publisher R.H. Donnelley (RHD), which recently acquired Business.com and owns search marketing firm LocalLaunch, is testing a new voice local mobile search product, [...]

  8. Yellow Pages and Product Diversification « Screenwerk Says:

    [...] their American counterparts. But we may see that change soon. RH Donnelley’s acquistion of Business.com is suggestive of a future when yellow pages providers operate a range of sites (verticals, [...]

  9. Businesses are confused by internet marketing - Can your business find the right product mix? | bg Theory, LLC Says:

    [...] Throughout those years, I worked with some very smart sales trainers on selling the “Triple Play”, which is a combination of Internet Yellow Pages, Yellow Pages, and Print advertising. It was RHD’s future strategy; and was so believed in that RHD acquired Business.com. [...]

  10. Test Drive the New Dex « Screenwerk Says:

    [...] New Dex By Greg Sterling RHD Donnelley has tapped the Business.com team — Business.com was acquired for $350 million last summer — to redesign DexKnows, its IYP destination, from the “ground up.” I [...]

  11. domainia.ca » Blog Archive » TOP 100 .ca DOMAIN NAME SALES OF 2008 Says:

    [...] There were some nice domain in the mix, but overall the quality of domains reported sold is not all that stellar. This could be due to the fact that most quality .ca domains are owned by a handful of Canadians and we tend to be more buyers than sellers. Clearly the BIG exception was Jobs.ca. A great domain. Worth the price? Sure if it’s developed properly. Look at Business.com. $7.5 million seemed like a steep price at the time. But once  developed it fetched $350 million. [...]

  12. Businesses are confused by internet marketing – Can your business find the right product mix? | Certified Knowledge Says:

    [...] Throughout those years, I worked with some very smart sales trainers on selling the “Triple Play”, which is a combination of Internet Yellow Pages, Yellow Pages, and Print advertising. It was RHD’s future strategy; and was so believed in that RHD acquired Business.com. [...]

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