Like Idearc Media earlier this week, R.H. Donnelley received a boost in its share price today after unveiling first-quarter results that showed market conditions are about as bad as expected, but not any worse. The company also unveiled a refinancing plan that will increase interest expense while also extending the maturing of much of its debt and gaining more flexible terms. The refinancing seems to have contributed to improved confidence in RHD’s stability.

The company also maintained a strong EBITDA margin in Q1 and announced plans to cut about US$30 million in costs, much of it in head count and other employee-related expenses.

The market seemed to like the results. As of 4 p.m. Eastern Time, RHD shares were up 28.5 percent to 8.20. Idearc shares are up almost 8 percent. Following its Q1 announcement, Idearc shares rose significantly and RHD enjoyed a bump as well. Today, the situation was reversed and RHD returned the favor, so to speak.

While it was a good day for the company’s share price, the outlook for ad sales painted by RHD CEO Dave Swanson was anything but rosy. The publisher reported total first-quarter revenues of US$674.7 million, a 2 percent increase over 2007. Ad sales, however, dropped 4.8 percent, which RHD executives pointed out was in line with 2008 guidance of mid-single-digit declines. The company confirmed its 2008 guidance on today’s call.

In describing the current environment, Swanson was very careful not to raise hopes that a recovery was on the horizon.

Responding to a question from an analyst, Swanson emphasized that he “has not seen anything that would indicate any positive turn to the North” in sales results. Asked specifically about Las Vegas, one of RHD’s key markets, Swanson described it as the worst business environment he has seen in his career. While Florida and Nevada remain the worst markets, the pain of a slowing economy is being felt across all 28 states RHD operates in, according to Swanson.

So RHD is making it clear that while the economy will keep results down for a while (and executives maintain the downturn is cyclical rather than secular), the company has taken measures, cost cutting and refinancing, that will improve the stability of the business. RHD is also working on a new version of DexKnows.com, which will go into beta later this year.

On the eve of today’s announcement, Deutsche Bank upgraded RHD from sell to hold, a boost that reflects a view that RHD is less risky as an investment than it was just a few weeks ago.

At this writing, Idearc Media’s stock was trading higher (up about 28 percent at noon Eastern) after an earnings announcement that shows the company has managed its costs well enough to grow EBITDA, while its revenues continued to slide.

Here are a few highlights from today’s earnings call (we will have a more detailed write-up for clients of The Kelsey Report):

• Acting CEO Frank Gatto squarely blames the soft U.S. economy for continuing softness in ad sales. For the first quarter, “multi-product” ad sales were down 6.2 percent. On a reported basis, total revenues decreased 4.5 percent to US$770 million, with print declining 5.5 percent to US$696 million, and online up 7.4 percent to US$73 million.

• First-quarter EBITDA was up 1.4 percent on a reported basis, though it declined 3.2 percent on an adjusted pro forma basis. The adjusted EBITDA margin grew slightly to 47.7 percent. The company cited tight cost management and lower traffic acquisition costs (some of which were related to the end of its MSN relationship, which wrapped up in mid-December).

• The company blamed a shift from fixed fee to variably priced online advertising for the relatively anemic 7.4 percent first-quarter online growth rate. Idearc said it expects full-year online growth to be more in the 20 percent range. Idearc executives said demand is strong for performance-based advertising.

• The company is rolling out a new packaged search program called Search Marketing Local that will enhance the value proposition Idearc can offer local advertisers.

• Idearc executives adopted a friendlier tone toward the national sales channel on today’s call. Under former CEO Kathy Harless, the national channel was made something of a scapegoat for soft ad sales. Today, Idearc executives said national results had not improved from Q4 to Q1, but they added that the channel was working closely with Idearc and said they hoped to see results of this in the second half of the year.

• Idearc leaders acknowledged that stand-alone local online sales channels like ReachLocal are increasingly a factor, but they were confident they could compete because it offers a broader package that includes print, IYP, SEM and SEO.

Alibaba, is China’s answer to Google and Yahoo!. The online site is 39 percent owned by Yahoo and recently entered a strategic partnership with Infomedia, the second-largest Yellow Pages publisher in India.

The agreement with Infomedia provides Alibaba access to the second-largest population in Asia. The deal with Infomedia opens the opportunity to sell online advertising to its more than 750,000 advertisers and leverages Infomedia’s sales force of 650 that can immediately begin to access a wider array of India’s SMB base.

According to The Wall Street Journal, “[Alibaba’s] move into India is part of its strategy to grow globally, as a large chunk of its revenue comes from domestic trade listings within China.”

As Google, Yahoo! and MSN continue to struggle in Asia and China in particular, homegrown Alibaba and Baidu continue to prosper in Asia. By tapping into population-dense countries, both Alibaba and Baidu have set themselves up for tremendous growth as both China and India’s middle class grows at exponential rates followed closely by the rapid adoption of broadband, mobile Web access and more stable business environments.  

The Nordic directory publisher Eniro announced somewhat disappointing results for the first quarter, with weaker than expected print results not fully offset by online revenues. Eniro President and CEO Tomas Franzén noted that the first quarter is seasonally weak for its online business.

In 2007, Eniro generated 54 percent of its revenues from online. This year, Franzén says the business will generate a majority of its revenues from non-print sources.

Group wide, Eniro posted first-quarter revenues of SEK1.38 billion, a 2 percent decline over Q1 2007. Online grew 13 percent, while print was down 14 percent (that’s organically), led by an alarming 24 percent organic print decline in Norway, largely due to the publication of the Oslo Yellow Pages.

And some of the weak print results were made weaker by the publication of big city Yellow Pages directories (such as Gothenburg in Sweden and Oslo in Norway) and fewer of the better performing local directories. Online results in Denmark were made weaker as well by glitches in integrating the Kraks online directory operation acquired last year. Generally, the company expects print to decline at a lower rate and online to grow at a faster rate for the full year 2008, with online growth more than offsetting print declines.

One interesting revelation from the call was that in 2009, Eniro will switch to a smaller format print Yellow Pages directory in both Norway and Sweden as part of a broader program to try to stabilize declines in print Yellow Pages.

Truvo announced today that CEO Andrew Day will step down June 1 and assume the role of chairman, allowing current Truvo Belgium Managing Director Donat Retif to take over as CEO. Retif has been with Truvo since 2005. He previously served as vice president of sales for Idearc, working in both the United States and Canada. Before that, he worked briefly in the VNU Promedia operation, which later became Truvo Belgium.

Day has brought a strong focus on developing online revenues to Truvo, and has often said directory companies need to generate about 30 percent of revenues from online sources to have sustainable business. Day also oversaw the rebranding of the company from World Directories to Truvo.

Today, Truvo also announced its 2007 financial results. Overall the company (excluding the Netherlands operation, which is being sold to European Directories) grew revenues 3.4 percent to 388.3 million euros, driven by online revenue growth of 27.4 percent. Print revenues (again, excluding Netherlands) declined 1.7 percent. Online accounted for about 22 percent of 2007 revenues, getting closer to Day’s 30 percent objective.

The communications plan outlined by Neg Norton at the YPA convention last week is already paying dividends. Like most people in our industry, I have a Google Alert for the term “Yellow Pages.” The April 16 summary edition is shown below. All five of the Google News Alerts are positive. Three of the five Google Blog Alerts are favorable. 

If the industry can put together a consistent daily message about the value of print and Internet Yellow Pages and the good things the industry does in its communities, positive press will be generated. In our view, to be successful this requires coordination and cooperation between the three trade associations and all their members. This will be a challenge, but it will pay dividends on Main Street and Wall Street.  

Google News Alert for: “Yellow Pages” 

 
Search for tomorrow’s leaders begins now
Financial Post - Toronto,Ontario,Canada
The Yellow Pages Group is another example of a company that in recent years has honed its corporate culture and developed an employment brand most companies …
See all stories on this topic 

Community Newsroom: Community benefits from collaborative project 
Oshkosh Northwestern - Oshkosh,WI,USA
The new AT&T Yellow Pages phone directory just became a more valuable resource thanks to a collaborative project spearheaded by the Responsive Education for …
See all stories on this topic 

Yellow Pages hold photo contest 
York Daily Record - York,PA,USA
Photos must be of a York or Adams County scene and entrants must be current York County residents. The deadline for postmark or delivery is June 2. …
See all stories on this topic 

 
Brands must keep up with the times 
Adelaidenow - Australia
Another finding is that Google has become a more effective brand than Yellow Pages for the first time. This is reflected in the survey results that show …
See all stories on this topic 

AT&T YELLOWPAGES.COM and Call Genie Sign Content Access Agreement
TMCnet - USA
COM, an Internet Yellow Pages and local search directory and subsidiary of AT&T (News - Alert). Call Genie will deliver YELLOWPAGES. …
See all stories on this topic 

Google Blogs Alert for: “Yellow Pages” 

Advertising in the Yellow Pages and Video Yellow Pages
One way of improving sales for your product is to advertise in the yellow pages. Depending on your advertising budget, you have to choose the content and design of the product to be printed in such pa.
Latest Articles at Ad-Matrix - http://www.ad-matrix.net  

17.2 bln Yellow Pages searches in 2007
By AM
The Yellow Pages Association announced that 2007 Yellow Pages usage grew to 17.2 bln searches in 2007, up from 16.7 bln in 2006. Print usage remained stable with 13.4 bln print Yellow Pages references, unchanged from 2006, according to …
IT Facts - http://www.itfacts.biz/  

Yellow Pages Make Mary See Red
By lori 
Way too often,…two sometimes three big, thick telephone books [are] thrown onto the driveway or front porch….WHY? I don’t use them, don’t need them, didn’t ask for them, and don’t want them. I haven’t used a telephone book to look up a …
Texas Blue Lime Productions - http://texasbluelime.com/wp  

 
Traditional Media By The Numbers: Yellow Pages
By Tom Tsinas
I have Yellow Pages on Google alert and with the Yellow Pages annual conference titled “YP Industry Pledges Counteroffensive.” last week in Las Vegas, it’s no wonder my inbox was overflowing with stats, figures and opinions on its …
Search Engine People Blog - http://www.searchenginepeople.com/blog  

Comment on Multiplatform Yellow Pages Usage On the Rise
By WebmasterT
The only way the numbers of offline references make sense is if they count my picking the Yellow Pages book up at my front door and putting it in the blue bin or the usage as a booster for small children and people of short stature. …
Sphinn: Comments - http://sphinn.com
 

Citing data from the latest Industry Usage Study, the Yellow Pages Association is trying to overcome some of the myths and misperceptions about who uses print Yellow Pages, how often and why. In a press release issued today, the YPA points out that the average Yellow Pages user is younger, more tech savvy and affluent than many might assume, and PYP use actually indexes higher in some cities known to be at the higher end of the high-tech scale, including Seattle; Portland, OR; Charlotte, NC; Denver; and Salt Lake City, among others.

At its recent convention, the association promised a more aggressive push to let the world know that Yellow Pages isn’t dead and much of the recent tsunami of bad press has been based on a poor understanding of the fundamentals of the business. In addition to the press release, YPA research honcho Larry Small had a piece on Search Engine Land that touts the finding that print plus online usage is growing.

We’ve been pretty clear in saying the industry, for all its problems (and it has plenty), has gotten a bad rap in the frenzy surrounding share price meltdowns at R.H. Donnelley and Idearc. We have also been clear in saying the industry needed to respond aggressively with data that restore a realistic view of Yellow Pages. We also think the industry still needs to steer the conversation away from aggregate usage and talk more about how the medium generates leads and ultimately transactions.

Earlier this week, my colleague Charles Laughlin posted an entry about the beginning of the YPA annual conference titled “YP Industry Pledges Counteroffensive.” That headline pretty much captures what was an upbeat event that attracted 600 attendees. As YPA President Neg Norton told the industry, “the root of the problem is a belief that we are going away.” The fact is that both the print business and the electronic piece suggest otherwise.

Norton said that industry membership is 462 companies, a new record, with 57 new members in 2007. The YPA, along with the ADP, is working hard on environmental guidelines to educate people that “Yellow is green.” He went on to talk about the 90-day communications plan designed to help people understand the value story and other industry strengths. There are six key elements to this plan, which is still in development.

• Continue to meet with the financial news media
• Approach B and C counties to tell success stories that will bolster local business
• Release the metered ad study that will prove return on investment
• Complete a small-business omnibus survey
• Release the global usage study
• Get the industry’s message across through op-ed columns

Today, the YPA sent out a note inviting people to become friends of the Yellow Pages and receive an RSS feed so that we all have the facts and figures at our fingertips. Norton spoke about Yellow Pages as an industry in transformation where its members had a choice between managing the decline or investing in the future. One example of a company that had done the latter is Australia’s Sensis. In a presentation made by COO Carol Johnson and General Manager Jo Lynne Whiting, along with two of their sales colleagues, they made it clear that the customer is at the top of the pyramid for their $2 billion revenue business, which we calculate makes Sensis the sixth-largest directory company in the world. While the business declined 2.8 percent in ‘07, it is up 4.9 percent in ‘08, and Johnson indicated that she expects better results at year-end.

The Sensis team put together 10 revenue recommendations, which they followed religiously starting with the elimination of all discounts and the need to train, train, train the sales force to tell the value story. Initially, customers didn’t believe that they would not discount and some were angry. But Whiting said that after one year, customer satisfaction and value for the money are both up 12 percent, and employee satisfaction is +8 percent over last year. They praised the work done by Dennis Fromholzer, who they hired as a consultant to help them build information-rich ads that are the No. 1 usage driver.

Two of the most popular panels ran consecutively. Frank Jules, president and CEO of AT&T A&P, gave his first speech at a Yellow Pages event and made it clear that AT&T, like Sensis, is investing resources, distribution and advertising in its largest markets. The company purchased Ingenio, a pay-for-performance corporation, and is offering new products like video ads, Hispanic directories and gatefolds. Video was the highlight of another highly rated panel that followed. Moderated by the CMO of Newsforce, Dana Todd, the focus was on new mobile and video tools and how adoption drives usage and usage in turn drives adoption.

Finally, two significant industry awards were given out. Dorothy Talkington, senior VP of national at Ketchum, received the Stuart Stanze individual contribution award, and Denny Payne, former CEO of AT&T A&P and YPA chairman, received the YPA Lifetime Achievement Award. These two winners were the exclamation points on the Industry Excellence Awards, whose winners can be found on the YPA Web site.

The industry faces greater challenges than ever before, but it is refreshing to hear its leadership admit those and outline a plan that can help get the message out to the various Yellow Pages constituencies that this is still a very strong business. Never before has Yellow Pages faced economic uncertainty, a generational shift, environmental issues and a slow but certain transition from print to digital. We believe the industry is up to the challenge.

The leadership of the Yellow Pages Association came out swinging against its growing number of critics and doubters at yesterday’s kickoff of the group’s annual conference in Las Vegas.

Chairman Dave Swanson (also CEO of R.H. Donnelley) gave a passionate defense of the directory industry, making a strong case that much of the criticism it has received has tried to pass off assertion as fact, while the facts often paint a different picture.

“Don’t look at share prices as an indicator of the health of our industry,” Swanson said, taking on the idea that his own company’s steep fall is in effect a referendum on the viability of Yellow Pages. Swanson argued that RHD’s and rival Idearc’s losses in enterprise value measured as a multiple of EBITDA are similar to what other media have experienced, including Google. However, because RHD and Idearc both have such high debt loads, the brunt of that “multiple compression” was absorbed by the companies’ stock.

While acknowledging changes, including the emergence of search and the new dynamic of empowered consumers who demand choice and customization, Swanson said the print product remains sound and continues to drive value. He took aim at the widely held view that print and online have a zero-sum relationship, with gains in online coming at print’s expense, when in fact many consumers use both products.

“Usage is not binary,” Swanson said. “Print and online both play a role.”

To drive his point home, Swanson showed a front-page photo from a Chicago-area newspaper in which a woman was walking out of her flood damaged home carrying a copy of the Yellow Pages. His point was clear. Life events, good ones and bad ones, still drive usage.

“We need to set the record straight on print,” Swanson said, yet he acknowledged that the industry’s future can’t be tied to print.

“No one can argue that local search is fragmenting, and the dominance of any one [player] is fading,” he said. “We need to understand that and adjust to it.”

The solution, Swanson argued, is to “create value, not products.” And whatever is being offered, it has to be sold to small-business owners, who as Swanson noted, don’t wake up thinking about buying advertising. And of course, Yellow Pages organizations have enormous sales channels, which Swanson believes are being “grossly underestimated” as assets.

His final point was that the game is far from over and many players lauded today could easily be a pile of dust tomorrow.

“The future is just as uncertain for a social networking site as it is for the local newspaper,” he said. “They are just starting from different points.”

What we heard yesterday made it clear that at least some of the industry’s leadership believes it’s time to fight back. As in politics, any assertion by the opposition that goes unchallenged ends up being accepted as fact. It’s a good thing the industry sees this and plans to do something about it.

Our view on Yellow Pages is that print is and will remain a strong foundation for a multichannel business. We believe print revenues will decline gradually over the next several years. It is also true that investment, better sales training and belief in the product could alter this outlook in a positive way. Later today at the conference, executives of the Australian publisher Sensis will talk about how they turned around print sales with a focus on execution and selling value.

The Association of National Advertisers Directory Committee has used a very public method to challenge North American Yellow Pages publishers to do more on research and transparency. The committee issued an “open letter” today urging directory publishers to expand syndicated usage research, commit to audit circulation, end directory extensions, and stop the “forced bundling” of primary and companion directories. The ANA Telephone Directory committee is made up of a who’s who of large national Yellow Pages advertisers, among them ServiceMaster, Allstate, Ford, Enterprise and Domino’s Pizza.

Many of the issues the ANA raised in the open letter are perennial complaints that national advertisers have about directory publishers. And many of the gripes are legitimate. We agree that Yellow Pages needs to be seen as a medium that is measured and accountable. What seems new is the use of an open letter and press release, clearly intending to shame publishers into taking action on their agenda.

However, not all the arguments the ANA uses hold water. For example, the ANA compares directory extensions to a magazine publisher failing to publish an issue and billing the advertiser anyway. While we won’t offer a blanket defense of extensions, this argument ignores the basic differences in the roles the two media play. A directory that sits in the home an extra month is still a useful resource for the homeowner when the washing machine breaks down. A magazine tends to be much more perishable.

We believe syndicated research plays an important role in helping advertisers decide among competing players. However, the real momentum in research should involve more precise call measurement and ROI data. Similarly, calling for circulation audits strikes us as fighting last year’s war. Certainly, publishers should audit their distribution (a more accurate term than circulation), but the ultimate measures of value have to be the number of calls the publishers can generate across all distribution channels — print, online and mobile — and ROI.

The ANA represents a significant portion of Yellow Pages advertising, and its issues need to be heard. However, its open letter might have had more impact had it acknowledged how measurement is changing — from establishing usage share to measuring actual calls and clicks.