R.H. Donnelley Buys Business.com


Yellow Pages and online local search company R.H. Donnelley Corp. has apparently shifted toward a more interactive online-focused strategy, as evidenced by yesterday's announcement of its acquisition of Business.com, a well-known business search engine and directory and pay-per-clock advertising network. Donnelley will pay $345 million in cash and deferred purchase consideration in a deal expected to close in the third quarter.

The deal will give Donnelley ownership of a handful of online properties, such as Business.com, Work.com and the Business.com Advertising Network. According to a company statement announcing the deal, Business.com optimizes revenues from these entities through its Performance Based Advertising (PBA) platform. Donnelley expects Business.com's search and directory technology and interactive thought leadership will help strengthen Donnelley's Triple Play business-to-consumer integrated marketing programs.

Business.com founder and CEO Jake Winebaum will become president of Donnelley's interactive unit (RHDi), which will house the Business.com properties as well as DexKnows.com and LocalLaunch!, a search engine marketing company. Donnelley apparently won't need to make any changes to make Business.com a profitable segment of its business. Business.com is already profitable and it is expected to post revenues of more than $50 million this year, according to the company statement.

While this deal certainly represents Donnelley's shift from the Yellow Pages business, it should make industry watchers wonder if it also represents the beginning of the end for traditional Yellow Pages services. This acquisition could affect more than just the two companies involved. It is unlikely that Donnelley will completely abandon its Yellow Pages roots as a result of its Business.com buy--at least not yet. But a tell-tale sign will be where the company invests much of its future resources--in the Yellow Pages or in its interactive online business unit now anchored by Business.com. Directory and database publishers need to keep a close eye on this one.

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