R.H. Donnelley Exits Bankruptcy; Faces an Even Stronger Internet

Submitted by Jen Jones on Fri, 01/15/2010 - 2:55pm

R.H. Donnelley Exits Bankruptcy; Faces an Even Stronger Internet

If there ever was a sure sign that print advertising is drastically down from where it was only a couple of years ago, other than the slew of newspapers around the country that have either been sold, merged, closed or gone Web only, it's the bankruptcy filing of R.H. Donnelley, a North Carolina-based publisher of phone directories. You know, the yellow pages. At one time, the single most ubiquitous business marketing channel.

The company originally filed for protection back in May of 2009. At the time, it was big news because of the company's notoriety as one of the region's most successful publicly traded companies. We covered the filing in a previous post. You can read it about here.

Fast forward to 2010 and you'll find a new, leaner, meaner version of R.H. Donnelley. At least that's the plan. Earlier this week, the company's reorganization plan was accepted by a U.S. Bankruptcy court, which means it can soon get back to business.

According to its Web site, the company is "... one of the nation's leading consumer and business-to-business local commercial search companies." Essentially, they publish print and online directories of business listings that consumers and other businesses use to learn about, track and contact companies. They also publish white pages so we can find one another in case you can't find a WiFi connection or Facebook is acting funny.

The company is confident it's next iteration will be a good one. In a recent statement, found in The News & Observer, CEO David Swanson verbalized that thought, stating that the company will move forward on a "stronger financial foundation."

R.H. Donnelley's new approach, about which they aren't saying much outside of court, should make for a compelling business case, given that the Internet and online searching continues to grow exponentially by the day. With every keyword entered into Google, Bing and Yahoo, the print industry's oxygen supply dwindles.

Search engine optimization, the act of programming a Web site to ensure its presence in the results of a search for its content or product line, is a multi-million dollar industry that is only in its infancy. Just think for a moment about Google. It dominates any conversation about the power of the Internet. It is one of most prominent companies, on or offline, in the world. Why? Because it made searching for something easier. They created the better mousetrap in what R.H. Donnelley calls "the commercial search" industry.

That being said, R.H. Donnelley may exit bankruptcy swinging, with all guns blazing and ready to kick butt and search for names. Yet, skepticism is to be expected. The News & Observer article (written by David Ranii) stated, "Although the company has improved its debt situation significantly, the revenue picture remains difficult. The company's revenue fell 18 percent to $534 million in the third quarter while ad sales, an indicator of future revenue, dropped 21 percent."

Out of bankruptcy, it appears the company will be clinging to its New York Stock Exchange listing, only to hope for the best. The approved plan included 100 percent ownership by the creditors. They were owed close to $6 billion.

The bottom line is that the Internet advertising and online search industries have only become stronger while the company was in bankruptcy. Again, their reorganization plan may call for a complete Web-based business strategy. They certainly have the data and established Web presence with www.business.com and www.dexknows.com to create a number of very comprehensive Web search tools. It can be done. Probably just not in print.

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