Insights From the SEAT Pagine Gialle Dividend Cut Announcement

Many articles today in the international business press about the SEAT Pagine Gialle dividend cut announcement. Obviously, their stock has been badly hit by the news but I found three interesting insights about their future online strategy.

Reuters: “Seat will not pay a dividend this year because, it said, “in the current credit market environment, the company has adopted a financial policy devoting available financial resources to debt repayment and Internet development in Italy.”

Bloomberg: “Majocchi [Seat’s CEO] is focusing on Italy this year, a strategy shift after betting on expansion abroad to lift sales and earnings. Seat is also introducing new products such as Web-based directory services to attract clients.”

The Guardian: “Seat, which has focused on print directories and selling Internet ads as an additional product to its core products, aims to change and sell Internet ads as a stand-alone product.”

What it means: first insight, SEAT has decided it will be investing in its core market instead of internationally to expand revenues. Second, it will be investing heavily in their online products as this is where the growth is coming. Third, it will un-bundle print and online to try to maximize online revenues. With a difficult financial market and possible worldwide economic slowdown, I suspect that this emerging strategy will be replicated in many territories. Focus on core market, invest heavily in online opportunities (new products, new technology development, and acquisitions) and un-bundle the print and online will be key in the next couple of years.


SEAT Pagine Gialle’s 2008-2011 Business Plan


Seat Pagine Gialle SpA’s 2008-2011 business plan, due to be released on May 11, will include investments into the company’s internet activities and its international operations, chief executive Luca Majocchi said.

In an interview with Milano Finanza on Saturday, Majocchi said investments will be financed via the strong cash flow he expects from Seat PG’s activities in Italy, where also an ‘interesting’ sales growth is expected.

Majocchi said the re-engineering project at is UK unit Thomson will be brought ahead, and in Germany an internet business will be launched.

Turning to new markets, he said in that Turkey Seat is developing a joint venture with Dogan and in China it plans to reinforce its position.

In further comments, Majocchi said he expects a ‘strong growth’ of operating margin this year thanks to the absence of one-off costs for the launch of new products and organic growth in Italy.

What it means: I consider SEAT PG one of the most innovative directory publishers in the world (and they are very fun to work with!). Can’t wait to see what they have in store. Check out their 3D view of major cities in Italy (similar to what I blogged about on Monday) to get an idea of their innovations online. Click on the 3D button and select Roma to see Rome’s colosseum. Very cool!