R.H. Donnelley Takes Care of Business.com
R.H. Donnelley, the publisher of both print telephone directories and Internet Yellow Pages, announced yesterday that it entered into an agreement to purchase enterprise search engine and ad network Business.com for $345 million in cash.
Santa Monica-based Business.com operates a search engine that sends potential B-to-B traffic to service and product providers in categories from accounting and business travel to traffic and logistics. It also operates the Business.com Advertising Network which places pay-per-click ads on third-party sites and on Web sites of major media outlets such as Forbes, BusinessWeek, Hoovers and The Wall Street Journal Online.
Donnelley, the third largest publisher of Yellow Pages print directories, has been working to diversify into online directories and local search for almost two years. In early 2006 the company completed its purchase of rival publisher Dex Media, including Dex Web Clicks, a search marketing agency aimed at small to mid-sized businesses. In September 2006, it purchased Chicago-based local search marketing expert Local launch. And last month it rolled out DexKnows.com, an online local search portal.
“over the last two years, we have been acquiring assets and building capabilities to help us take advantage of the huge opportunity that we have to leverage our brands, our content, our sales force and our servicing infrastructure to build a leading online and offline local commercial search business,” Donnelley CEO David Swanson said in a conference call yesterday. “Today’s announcement builds on our plans by bringing us a leading destination site and a fast-growing and profitable business in the B-to-B online and search vertical.”
Swanson said the Business.com tech platform and ad network will permit Donnelley to sell its own search marketing ads on company-owned sites and those of third-party partners, and also to sell ads into the DexKnows.com site.
The deal is expected to close the third quarter of 2007, at which time Business.com co-founder and CEO Jacob Winebaum will become president of Donnelley’s RHDi interactive unit.
Winebaum and EarthLink founder Sky Dayton founded Business.com in 1999, spending what was then thought to be an outrageous sum of $7.5 million to purchase the domain.
Donnelley also announced its second-quarter 2007 financial results yesterday. During the quarter, the company saw total ad sales of %729 million, a 2% increase over the same period last year. Net revenue for the quarter was $667 million, and net income was $24.9 million. R.H. Donnelley does not break out online revenue.
