R.H. Donnelley Buys Business.com for a Rich $345M

Telephone-directory company R.H. Donnelley Corp. said it has agreed to acquire internet business search/directory site Business.com Inc. for $345 million after it won an auction conducted by Credit Suisse. Founded by entrepreneurs Jake Winebaum and Sky Dayton in 1999, who at the time were ridiculed for doling out $7.5 million on a single internet domain name, Business.com's online version of Donnelley's Yellow Pages allows users to search for business services. Its earnings comes through revenue sharing from the companies whose sites benefit from the clickthroughs. Other bidders in the auction included Dow Jones & Co., New York Times, and News Corp. Earlier this year, Microsoft Corp. founder Bill Gates predicted that "yellow-page usage amongst people... say, below 50, will drop to near zero" in coming years. "With this transaction R.H. Donnelley takes another significant step forward in the online local commercial search marketplace," said CEO David C. Swanson. "We will immediately gain a profitable business-to-business vertical that is widely recognized as one of the leaders in the market. We also gain technology and talent that will accelerate our capabilities with DexKnows.com and other aspects of our digital strategy." Business.com's 2007 Ebitda [earnings before interest, taxes, depreciation and amortization] is about $15 million according to the Wall Street Journal -- giving it a rich 22 times Ebitda multiple. RHD said in its press release it expects Business.com to generate revenues of greater than $50 million in 2007. The deal is expected to close in the third quarter.

Sources: Press release, PaidContent.org, Wall Street Journal, Reuters
Commentary: RH Donnelley Buys Business.com Following Fierce Bidding Battle • How to Invest in (Even Misspelled) Domain Names • Answers Corporation Buys Dictionary. com For the Domain Name
Stocks/ETFs to watch: RHD, NYT, DJ, NWS

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Comments

[Vjai222:]

$375 million by far the largest price paid for a domain name - Business.com - as the actual business remains insignificant.

Comapre w/ Answers.com (ANSW) recent buy at $100 million for Dictionary.com + Reference.com + Thesaurus.com, doubling its traffic and moving to the top 28 website in US
Compare this w/Business.com traffic

www.alexa.com/data/det...;site1=Dictionary.com&...

seekingalpha.com/by/sy...

2007 Jul 26 12:16 PM

[Directoy:]

Most internet users do not know the benefits of the website directory. It organizes hundreds and thousands of websites into categories as they pertain to the user. These website directories make it mush more convenient to find one internet site out of the 80 million listed today. It is even better to find the directories have sorted them into groups for easier searching and categorizing. Searching through the mounds of internet sites can be time consuming and a hard task to complete.

2008 Dec 30 06:00 PM