New CEO Presents Idearc’s 1H Results, Outlines Game Plan
New CEO Scott Klein presented Idearc Media’s first-half results and previewed his plans for reorganizing and reenergizing the company. The main theme of the presentation was a “Journey of Transformation,” which is truly what Idearc needs based on the results of Klein’s eight-week evaluation of the organization and its second-quarter results released today.
Financially, the organization continued its decline in revenues, reporting multi-product revenues of $1.53 billion for the first six months of 2008, a 5.1 percent decrease compared with the same period in 2007. Year-to-date Internet revenues reached $148 million, a 5 percent increase. While online revenues increased, one analyst pointed out that the 2008 goal was pegged at 20 percent, making the 5 percent gain less than optimal — especially compared with AT&T’s second-quarter online gain of 40.2 percent. Other peers also posted strong online results, including Yell Group, which saw a 27.1 percent first-quarter 2009 growth rate for Yell.com, and PagesJaunes, which reported growth of 21.6 percent for its Internet business during the first half of the year.
Klein’s plan of action calls for streamlining the Idearc organization, which will include reorganizing the sales force for better span of control, improving sales training, streamlining pricing approaches, centralizing operations and reducing the workforce (excluding sales reps) by 20 percent. Some announced moves include closing sales offices, walking away from selected expansion markets and abandoning the Solutions At Home magazine product.
According to Klein, as quoted in Idearc’s press release:
“It is clear that we have not made the leap from operating as a division of Verizon to being a stand alone public company. You will see us catch up quickly. … We are also changing Idearc’s management structure and focus. By centralizing and restructuring, we can eliminate complexity, maximize efficiency, and become easier to do business with. While the changes we have made, and will continue to make, will take some time to be fully realized, I am confident we will succeed.”