Weak ad outlook shreds Donnelley
In addition to the poor economy, I’m sure those Internets, darn mobile phones or those unwieldy 5 lb books themselves may also have a little something to do with these results.
Donnelley goes from a $6 billion market cap down to less then $500 million in less then a year. Not suprising but any time $5.5 billion goes away that quickly it must really hurt. Ouch! Being the CEO of a Yellow Pages publisher is a close second behind a newspaper publisher as the toughest job going in media.
The other bad news that came out from Donnelley that’s not referenced in the article is that Jake Winebaum, who was the CEO of the Business.com unit they acquired, was leaving. I’m sure there are some really smart people at Donnelley, but Jake has a fantastic reputation and track record in the industry as someone who knows how to build strong interactive businesses. For me Jake was a big part of that acquisition. In my opinion not having him involved in the day to day business can’t be good.
If Donnelley could some how magically make that massive debt disappear it might make sense for Google, Yahoo! or Microsoft to acquire this business. The debt will be hard to overlook even at a low valuation, especially when compared to the $200 million valuation Yelp was rumored to have gotten in their last round of financing that I referenced in an earlier post.
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