YP Holdings (“YP”), the new entity combining the assets of AT&T Ad Solutions and AT&T Interactive, launched today as a separate company. Majority owned by private equity firm Cerberus Capital Management, AT&T retains a significant minority stake (47%).
Facts and data from the press release:
- YP had $3.3 billion in revenues in 2011.
- 30% of 2011 revenues (nearly $1 billion) “derived from its digital and mobile platforms, making YP the ninth-largest digital media company of any type in the US”
- 700,000 local advertisers throughout the country
- YP.com and YP Mobile have 38 million monthly uniques
- YP Local Ad Network sees 70+ million monthly uniques
- YP’s Real Yellow Pages directories used “more than 5 million times daily by consumers to seek out local businesses”
- The new company will be headquartered in Tucker, Georgia and led by AT&T Interactive CEO David Krantz
What’s your view of the outlook for the new company?
May 10th, 2012 at 2:26 am
Interesting that they lead with their total revenues for 2011.
You would think that if they don’t quickly make some acquisitions (to grow their revenues), then (with the shrinking of the YP revenue base) the first annual report of YP Holdings in a years time will have them reporting total revenues of $2.5 Billion.
Surely, they could have lead with something stronger than effectively saying “we currently have lots of revenues, but everyone knows that those revenues are shrinking”?
May 10th, 2012 at 7:25 pm
I think there are only two things to track with YPH (and other publishers for that matter) although i doubt they will want to share them:
1. Percentage of ‘digital’ revenue that comes from IYP vs true digital marketing services (DMS). Analysts and investors will want to know this because the decline in IYP revenues has already started in practical terms and while propped up by traffic deals the decline is inexorable as Google and others refine their local search models and chip away at the franchise (e.g Google has captured name in mind searches, Facebook is working hard on word of mouth equivalents and dedicated verticals are going after the heartland categories). Efforts to bridge the gap with true digital services revenues are anemic at best among incumbents un-used to the complexities . My guess is that most publishers still get north of 80% of their revenues form print and IYP. My further guess is that the IYP decline will far outpaces any increase in DMS revenues for most of the incumbents YPH included.
2. Sales resource allocation and operating model… fancy language for how they a) handle their unionized sales people b) where they focus their sales resources. my strong suspicion given their cost base is that YPH will refocus their model to serve the 15/20% of advertisers in the upper spend bands who generate probably 70-80% of the EBITDA. they simply cant afford to serve lower value customers given the increased service costs that come with providing DMS and will intentionally or otherwise have to reduce their costs by de-supporitng lower value customers (lets say those who spend less than $2500 per year…). as their ability to renew them on core O/O media declines their ability to serve them will become increasingly dependent on costs of the DMS in a marketplace that is already effectively owned by a nation of independents who can use time as a competitive tool.
Someone will figure this out, but the likelihood it will be an incumbent (and YPH is still an incumbent) is not that great….
May 11th, 2012 at 2:42 am
[...] by Cerberus Capital Management, L.P. (“Cerberus�). Industry blogger Greg Sterling of Screenwerk described a transaction as YP being “jettisoned from a mothership� (ATT). Antoine Gara [...]
July 5th, 2012 at 1:59 pm
[...] publisher and ad network YP (the private-equity owned combination of AT&T Interactive and AT&T Advertising Solutions) has released its US-focused Q2 “Local Insights Report.” The data in the report are [...]
July 5th, 2012 at 2:09 pm
[...] publisher and ad network YP (the private-equity owned combination of AT&T Interactive and AT&T Advertising Solutions) has released its US-focused Q2 “Local Insights Report.” The data in the report are derived [...]
July 5th, 2012 at 3:07 pm
[...] you like this story? Local publisher and ad network YP (the private-equity owned combination of ATT Interactive and ATT Advertising Solutions) has released its US-focused Q2 “Local Insights Report.” The data in the report are derived [...]