The European directory and local search operator Truvo has taken major steps toward consolidating around its flagship Belgian operation. On Dec. 22, Truvo “divested” its operation in Ireland, selling it to Contact Holdings, which operates Yellow Pages companies in the Baltic States. Terms of the transaction were not disclosed.

Truvo has also dramatically curtailed its senior management team, eliminating five positions, many held by longtime Truvo executives. The departed include CFO Marc Goegebuer, MD Belgium Martine Bayen, VP HR Peter Vandenheulen, VP Marketing Jose Lema and VP Operations Ramon Ferrer. CEO Donat Rétif will assume the role of MD Belgium while the other positions will be eliminated or absorbed by remaining staff, according to an announcement sent to investors on Dec. 23. The combination of selling Ireland and eliminating senior positions will save Truvo 6 million euros in costs, according to the statement.

Jon Martinsen is CEO of Contact Holding. He and Truvo CEO Donat Retif worked together at Herold Business Data in Austria when it was owned by GTE (later to become SuperMedia). Herold is now a unit of European Directories. Contact Holdings is apparently the new name for Interinfo Holdings, which operates directory companies in Estonia, Latvia and Lithuania. Interinfo is owned by the private-equity firm Balt Cap.

Truvo’s Irish operation, which uses the brand Golden Pages, was battered by a combination of a brutal Irish economy and a heavy exposure to one large metro market, Dublin. The last full-year figures for Truvo Ireland were in 2009, before a recapitalization removed Truvo’s obligation to report its results publicly. Truvo Ireland finished 2009 with revenues of 54 million euros, a 26 percent decline from the year before. Assuming similar declines over the past two years, the business would end this year in the 34 million euro range. David McGuffy was MD of Truvo Ireland. It is unclear if he will remain with the unit under its new ownership.

Truvo (then World Directories) was initially a minority owner of the Irish directory operation. It acquired the remaining 63 percent of the Irish business from Eircom back in 2002 for US$186 million (at the 2002 exchange rate), which was roughly an 11X multiple on EBITDA.

Rétif makes clear in the statement that Truvo sees its future tied largely to the fortunes of its Belgian operation. The fate of Portugal, Truvo’s remaining non-Belgian operation, is uncertain, but it’s logical to assume Truvo may be seeking a buyer. Truvo is also a minority owner of Trudon, the South African directory and local search provider.

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Truvo USA, the holding company that owns the European directory publisher Truvo, has filed for bankruptcy protection, with plans to hand over the company to its senior creditors. Truvo’s European-based operating companies did not file for bankruptcy protection.

Truvo operates in Belgium, Ireland and Portugal, and it recently divested its small Romanian operation. These markets are either heavily exposed to large metro markets, suffer from exceptionally poor economic conditions or both.

Truvo has been struggling to keep pace with a rapid shift from traditional to digital revenues that led to a nearly 28 percent decline in group print revenues in 2009, compared with a 12.1 percent online growth rate. The company has been aggressively innovating around a shift to multiproduct sales, including retraining its entire 1,700-person sales force, and has been very upfront in its view that the print Yellow Pages business is no longer viable in its markets, thus the need to innovation quickly and reinvent itself as a local search company. Truvo has most recently announced a deal with TomTom to include Truvo’s directory content on the TomTom navigation devices.

Truvo signaled a dramatic financial move may be imminent when it announced on June 1 that it would not make a scheduled interested payment on its senior debt.

According to news reports, Truvo plans to reorganize and then hand over the company to the holders of its more than 1 billion euros worth of senior loans.

Truvo is not alone in seeking the avenue of bankruptcy protection. Both Idearc and R.H. Donnelley followed that path, both emerging within a year with clean balance sheets and new names, SuperMedia and DexOne respectively.

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Truvo revealed in its first-quarter earnings report that in March it agreed to divest its Romanian operation to the German company People Holding GmbH for 1 euro, essentially giving the operation away free of debt in order to get it off its books. The deal closed this month.

In 2009, the Romanian operation (Pagini Aurii) generated revenues of 1.2 million euros, down 47.8 percent over the prior year. Print revenues were down 54.5 percent to 1 million euros, while online doubled to 200,000 euros.

Given Pagini Aurii’s small size and recent performance, Truvo wasn’t likely to get anything material for it. Truvo retains much larger operations in Belgium, Ireland and Portugal.

People Holding GmbH is associated with the German directory publisher Heise Medien Gruppe.

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Here’s a question: How long would directory publishers sit back and let new companies such as RedBeacon, AlikeList and others disrupt the leads economy for SMBs with search and socially driven features such as Twitter and Facebook? Or Google, with Place Pages? That’s a question that Local Matters and other Yellow Pages  vendors have obviously asked themselves.

Now Local Matters has come out with “Destination Search,” a new social platform that seeks to level the search and social playing field for its U.S. and international clients, which so far includes  Dex B2B in the U.S;  Truvo, European Directories and Pagini Aurii in Europe;  and Yellow Pages Group in New Zealand.

Playing off a feature set originally developed for real estate multiple listings services, Local Matters’ platform includes state of the art social and search features. It also seeks to leverage existing strengths, such as business profile information.

Key features of the white label solution include enhanced profile listings; search optimization; integration (and easy sharing) with Facebook and Twitter; blog enablement; ratings and reviews ported from Yelp and other sources; and the addition of social media feeds on assorted online advertising.

Kris Skavish, Vice President of Products and Marketing, told us that Local Matters started planning Destination Search last September, with the specific intent of focusing on building rich local context. “A problem with online directories has been search relevancy,” she noted.

Another challenge has been to reconcile Yellow Pages headings with most searched categories, which are typically microheadings. “’Plumbers’ is too broad. You need to get to the correct root,” said Skavish, noting that Local Matters has also created custom microheadings for categories such as hotels and attorneys.

For instance, “romantic hotels” might be sought out in user generated content but not generally included as a category. Users can also rate pictures included in romantic hotels.  Publishers can also insert content at the top of the page, or refine results. They can also create brand oriented categories, such as “Toyota.”

While Destination Search leveraged Local Matters’ work with real estate Multiple Listing Services,  important differences revealed themselves, added Skavish. “With the MLS,  you prove your value with a lead ” she notes. “It isn’t a ranking model.  And in real estate, the default view is maps. But with Yellow Pages, it is an ad model. You want users to make an action.”

Local Matters CEO Mat Stover is a featured speaker at Marketplaces 2010 March 22-24 in San Diego.

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