NEW YORK (AP) — Dex One Corp. and SuperMedia Inc., two Yellow Pages publishers, on Tuesday said they agreed to merge, with the goal of saving money in a dwindling business.
Shareholders in the companies will exchange their shares for new shares in a new company, Dex Media.
Based on the closing stock prices of Dex One and SuperMedia on Monday, the new company would be worth $100 million. But shares of both existing companies jumped in heavy Tuesday morning trading, putting the total value of the new company at about $115 million.
Shares of Dex One added 48 cents, or 39 percent, to $1.81, while SuperMedia shares gained $1.27, or 49 percent, to $3.85.
Dex One shareholders will own 60 percent of the new company and SuperMedia shareholders will own 40 percent, proportions that reflect the relative values of the companies as of Monday’s close.
The companies said Dex Media should be able to cut annual costs by $150 million to $175 million by 2015, partly by job cuts. The two companies employ a combined 5,800 people.
The deal is expected to close in the fourth quarter of this year.
The CEO of SuperMedia, Peter McDonald, will be CEO of the combined company. Alan Schultz, chairman of Dex One’s board, will chair the board of the combined company.
Alfred Mockett, Dex One’s CEO, will step down when the deal closes.
Both companies filed for Chapter 11 bankruptcy protection in 2009, as consumers shifted from using printed directories to doing online searches. They exited bankruptcy in 2010. Both sell listings in online directories as well, but have been unable to compensate fully for the drop in print revenue.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
(a) On August 23, 2011, Dex One Corporation (DEXO) (the “Company”) was notified by the New York Stock Exchange (the “NYSE”) that the Company had fallen below one of the NYSE’s continued listing standards. Rule 802.01B(III)(ii) of the NYSE Listed Company Manual requires that the Company’s average total market capitalization over a consecutive 30 trading-day period equal or exceed $100 million.
Under applicable NYSE rules, the Company has 10 days from receipt of the notice to inform the NYSE that it intends to cure the deficiency and 45 days from the receipt of the notice to submit a plan advising the NYSE of definitive action the Company proposes to take that would bring it into compliance with Rule 802.01B(III)(ii) within 18 months of receipt of the notice. The Company notified the NYSE that it intends to cure the deficiency within the prescribed timeframe.
As required under NYSE rules, the Company issued a Press Release on August 26, 2011, announcing that it had received the notice of non-compliance and that the Company intends to cure the deficiency within the prescribed timeframe. A copy of this press release is attached hereto as Exhibit 99.1 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
What does this spell for Dexknows.com, Superpages.com or Yellowpages.com? The numbers on overall search have been receding to levels close to or below 2004. Does this algorithm change spell doom for online yellow pages sites? If you have done searches over the last month for a local plumber or landscaper you’ll find that most of the online yellow pages sites are not showing in results anymore. Time will tell, but I will continue to watch spend levels on the PPC side for all three as well as look at the trends and report back.
Google’s search quality police cracked down on content farms and other low-quality Websites with an algorithm change that impacts 12 percent of the company’s search results.
Google Feb. 24 said it had flipped the switch on an algorithm change that pushes down low-quality Websites in its search engine, the latest in a series of moves to combat the rise of content farms and other Websites that infest the Web.
The ranking change, targeted at Websites that copy content from other Websites and those that provide little value for searchers, will impact 12 percent of the company’s search results, said Google Fellow Amit Singhal and his lieutenant, Google principal engineer Matt Cutts.
Google didn’t mention content farms by name, but Search Engine Land’s Danny Sullivan posited the search engine could well be targeting sites such as Demand Media’s eHow, which produces both solid content and low-quality content.
Demand Media responded to Google’s change rather diplomatically in a blog post, noting that it hadn’t seen any material net impact to its content business.
Part of my job consulting with small and medium sized business about online advertising programs, looking at the big picture of the online marketing program is always something we talk about. I have always been a very big advocate of being listed as many places an you can (yelp.com, Dexknows.com, superpages.com, yellowpages.com, google places, yahoo local, etc). Google Trends combined with rising costs in online directories have made me start to take a hard look at how to advise my clients. If you look at the graph below you can see overall usage returning to levels of 2004, below in some cases.
With internet usage growing every day, the usage of destination directory sites showing opposite trends it’s hard to predict the usage in 2015 or even 2020. Most directory publishers would have you believe the opposite, but Google trends shows contrary information. With rising costs of online directories coupled with diminished usage, please do the research and make the best decision you can based on that information.
If you would like more information on the article you just read please contact Chris directly at 720.427.3707
