Directory Publishing: A Stock Market Perspective

On Tuesday, at the Kelsey Group conference, Sami Kassab, Analyst at [praized subtype=”small” pid=”9c5b00e196fcc352a39089955ee0db0496″ type=”badge” dynamic=”true”], presented us the financial market’s point of view on directory publishers.  As most of the Praized blog readers know, stock markets have drastically punished directory publishers in the last 12 months. Kassab offered us his very relevant analysis on what investors want to see from the industry and what he thinks is the future of directory publishers.

What investors want to see?

  • Repair balance sheets and avoid default through costs reduction programs like closing of locations and titles, headcount reduction and outsourcing and offshoring
  • Asset disposal but he indicated few buyers and limited financing available.  He gave as example Truvo’s disposal of its Dutch business in July 08 and rumored disposals of Telegate/Thomson by Seat or Yell’s exit from Latin America.
  • Improve revenue growth performance through
    • Defense of print revenues (via new product launches, long-term contracts and new pricing policy)
    • Increased online revenue growth (via higher usage, improved monetization and new products like classifieds or video)
    • Leverage sales force (via new SEO/SEM products and maybe outdoor advertising)

What he sees in his crystal ball?

  • Usage and revenue decline of print likely to accelerate with further growth of broadband and mobile technologies and as witnessed for old legacy media products in other media industries
  • Usage and revenues of online assets likely to accelerate
  • EBITDA margins under pressure from changes in revenue mix and additional investments. Growth of 2-4% for best in class players, decline for other players.

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