Business.com sold to RH Donnelley for $345 million

Business.com sold to RH Donnelley for $345 million

Summary: RH Donnelley said Thursday that it bought the Business.com domain for $345 million, edging out bidders such as Dow Jones, New York Times and News Corp.

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TOPICS: Networking
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RH Donnelley said Thursday that it bought the Business.com domain for $345 million, edging out bidders such as Dow Jones, New York Times and News Corp.

The deal, first reported by PaidContent.org closes out what appears to be a fierce bidding war. PaidContent reports News Corp. dropped out once the price broke $300 million. Dow Jones couldn't get its act together as it weighs the News Corp. bid. And the New York Times held tough until the end.

According to RH Donnelley's statement, the company paid $345 million in cash and "future consideration."  Business.com CEO Jake Winebaum will also become president of RH Donnelley's interactive operations. Winebaum will oversee RH Donnelley's online properties including DexKnows.com, LocalLaunch, Business.com, Work.com and the Business.com Ad network. He will report to RH Donnelley CEO David Swanson. The company said:

Through this transaction, R.H. Donnelley will add to its existing interactive portfolio a rapidly growing and profitable business-to-business company, with online properties that include Business.com, Work.com and the Business.com Advertising Network. These online brands attract an audience of highly qualified and motivated business decision makers. Business.com optimizes the revenues from these properties through the use of its Performance Based Advertising (PBA) platform, which is considered to be one of the most advanced systems in the marketplace.

In addition, R.H. Donnelley's Triple Play business-to-consumer integrated marketing solutions will also benefit from a significant infusion of leading-edge search and directory technology and interactive thought leadership from Business.com, particularly in the areas of performance based advertising technologies and corresponding ad network capabilities.

That's a fancy way to say RH Donnelley is diversifying as the yellow page listing business--currently a cash cow--erodes due to online competition.  Business.com has 100 employees, is profitable and on track to deliver $50 million in 2007 revenue.

Despite my initial skepticism over the Business.com auction the RH Donnelley purchase makes business sense. If a content company acquired Business.com it would have tried to turn it into a portal and hamper the site's existing model. Business.com as constructed is basically a directory for advertisers.

Meanwhile, RH Donnelley publishes yellow pages and has been fairly aggressive with its online moves of late. In other words, Business.com is a nice fit for RH Donnelley since it is likely to be a handy directory and lead generator.

Topic: Networking

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