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Recent Directory Business Sales
Posted by rod@drury.net.nz in Communications at 4:51 pm on Saturday, 3 March 2007

Sunny reports (reposted for convenience)…

It continues to amaze me that there are still telcos in this world that are still looking to sell their directory business. Yes, if you take a look at the recent purchase price of directory firms, it is easy to see why telcos are so enticed to sell. Just look at what some firms have sold for in recent years.

Target/Acquirer/Amount (Euros billion)

But there is a reason why both private equity and print firms are jumping at the opportunity to acquire these assets. These directory assets certainly generate a healthy and constant revenue stream. But more importantly, there are indirect assets (customers, brand) that are most crucial. Specifically, for telcos, outside of their basic infrastructure (which depreciates and constantly needs upgrades), their brand and customers are their core assets. Why would you ever give that up, particularly if you are a fixed line carrier.

It is hard to believe that a short-term cash infusion will, in the long term, provide the necessary foundation for growth if you sell your customer base and brand away.

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Comments(1)

    Comment by Rob at 9:03 am on 9 March 2007

    ..the rational does seem a little thin, but i guess it comes down to the opportunity cost and what the cash injection gets them over the next 10 years as apposed to the alternative where the web, google and yahoo slowly eat YPG lunch. Plus the Telco usually still gets to hold on to most of the customer data and brand value for a couple of years after the sale and if it sells to seven it all very cosy indeed..or maybe its just that they are sheep playing catch up.