RHD: The Evolution of Triple Play

Today I attended the R.H. Donnelley “analyst workshop” in Denver. Much ground was covered, so we’ll offer a few quick takeaways here and follow up with more detail in an upcoming TKR Advisory.

One key objective of the meeting appeared to be for RHD’s leadership team to introduce its newest asset, Jake Winebaum, to the investor community. Winebaum did not disappoint, coming across as knowledgeable and confident, despite having all of one month of Yellow Pages experience under his belt.

RHD seemed to do a better job of explaining the Business.com acquisition, which was essentially about buying the technology to enable a more robust search experience and more efficient monetization. Plus the deal brought with it Business.com’s A-list management team, which includes Chief Science and Strategy Officer Paul Dagum, the former founder and CTO of Rapt, and Brian Barnum, the former CFO of Rent.com.

One of the clearest impressions I came away with from the meeting was that RHD has a cogent vision of where it wants to go, from a business that was largely print-centric to one that is all about selling leads fulfilled across multiple platforms. The publisher is aggressively training up its sales channel on its “triple play” model, which includes print Yellow Pages, online Yellow Pages (DexKnows) and “the rest of the Internet” or SEM.

Ultimately, the model seems to be moving toward one in which the advertiser is sold on a package of leads, with the triple-play components being the sources of fulfilling those leads. Depending on category, geography and so on, the leads are drawn to varying degrees from print, IYP, search and potentially voice. This will be transparent to the advertiser, which cares only about driving enough new business to more than pay for its advertising spend.

This doesn’t yet fully describe RHD’s model, but that is the clear direction, and it is a vision TKG believes will be key to sustaining the core product over the longer term.

We’ll have more to say about the meeting later. One thing is apparent. At least some of the analysts present were not impressed by what they heard today. RHD’s stock declined by about 2 percent today, on a day when the Dow rose 0.25 percent, and rival Idearc Media was up almost 2 percent.