Our focus is on becoming the ad agency for small and medium businesses in America,” he added. “We’ve really transformed from being a division of a telephone company. “Clearly, we’re focused on the former, not the latter.” “There are two kinds of companies in the world: those that change and those that go out of business,” Idearc’s Chief Executive Scott Klein said. Under Idearc’s reorganization deal, Paulson & Co will own nearly half the company when it emerges from bankruptcy and be able to nominate a director to serve on its board.
John Paulson, the billionaire investor and founder of hedge fund Paulson & Co, is also betting he can make money on the yellow-pages transition. The firms are also attracting interest from big-name investors. Donnelley had support for its plan from the majority of its bondholders prior to filing for bankruptcy. Donnelley plans to put its reorganization plan in front of a judge in January, and hopes to be out of bankruptcy soon after. bankruptcy judge in Dallas said this week that Idearc’s reorganization plan would be approved, allowing the company to emerge from bankruptcy by year-end. Each plans to shed some $6 billion in debt from their balance sheets, and continue restructuring their businesses to fit a blended model of Internet and print advertising.Ī U.S. Donnelley followed in May.īut the two have moved through bankruptcy quickly. Idearc filed for bankruptcy in March and R.H. Donnelley, was similarly debt-laden, having pursued a strategy of acquisitions from 2003 to 2007. Idearc, which was spun off from Verizon VZ.N in 2006 was left with about $9.1 billion of debt from the deal. Both companies had trouble meeting payments on their debt.
recession hit, the yellow-pages were crushed by a prolonged decline in advertising spending and a simultaneous drop in the use of print directories, generally. We are the conduit between this merchant in Mansfield, Ohio, and a consumer who starts a search online for a landscaper in Mansfield, Ohio,” Swanson said. “People relate to us as a product company - the yellow-pages - but we don’t get paid by people who use the yellow-pages, we get paid by small businesses for helping them create ad messages, build websites, and show up in search engine results,” said David Swanson, chief executive of R.H. Donnelley Corp RHDCQ.OB filed for bankruptcy this year some thought it would not be long before phonebooks disappeared.īut now the two are preparing to emerge from court protection, and their high-tech plans to transform their businesses could be the biggest thing to happen to the industry since the color yellow. yellow-pages publishers Idearc Inc IDARQ.PK and R.H.
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