WSJ Comments On Idearc Bankruptcy & Verizon Culpability
A few days ago, the Wall Street Journal’s Dennis Berman commented in his column entitled “The Two Sides of Verizon’s Deal Making” on whether Verizon might have some responsibility for the bankruptcies of Idearc, Hawaiian Telecom and FairPoint Communications. As you may recall, I posted an op-ed piece on the subject, Idearc’s Bankruptcy – Who’s Really Responsible? at Search Engine Land not long back, and now Berman’s take on the issue appears to hold a lot of sympathy for my position that Verizon caused the yellow pages company to fail shortly after it was spun off by requiring it to do so with an unreasonably high debt load.
Berman states that while the market in 2006 may’ve allowed Verizon to take billions in the deal divesting itself of its directories corporation, Idearc, he further states:
“It took too much.”
Will there be any consequences for Verizon’s throwing off these companies with unserviceably high debt loads? Burman reports:
“These things matter greatly to how state and federal regulators perceive the company. Maine, New Hampshire, Vermont and Hawaii each are in an uproar over the FairPoint divestiture, with much of the ire directed at Verizon.”
In a brief video piece, David Berman debates the issue with Evan Newmark, who takes the opposite viewpoint that Verizon should not be held responsible for the performance of its divested companies. (more…)
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Posted by Chris of Silvery on 08/18/2009
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Filed under: General, Market Data, Worst Practices, Yellow Pages bankruptcies, bankruptcy, divestments, FairPoint Communications, FairPoint Communications Bankruptcy, Hawaiian Telecom, Hawaiian Telecom Bankruptcy, idearc, idearc bankruptcy, M&A, mergers and acquisitions, spinoffs, Verizon
Is Verizon Responsible for Idearc’s Bankruptcy?
My op-ed piece, “Idearc’s Chapter 11 Bankruptcy: Who’s Really Responsible?” published today on Search Engine Land, and in it I put forth my position that Verizon is responsible for spinning off the company with an unreasonably huge debt load, and the people ultimately paying the bill are the stockholders.
I describe in the article how Verizon spun off Idearc Media (division which publishes print phone books and operates Superpages.com among other online yellow pages), and set that company up to pay back some billions of dollars for its worth. Verizon then turned around and resold those debt instruments to other companies, fully divesting itself of ownership in the new, standalone company.
This sequence in of itself isn’t remarkable – it’s the normal process a company might go through when spinning-off part of itself to form a new company.
But, my contention is that it was done so in a highly irresponsible manner. Verizon had to know beforehand that print directory business was going into shrinkage mode, and that the debt repayment structure would simply be too much for the new company to be reasonably expected to be able to handle. If so, then this could be expected to be a form of fraudulent conveyance, and Verizon could be culpable.
Is my contention outrageous?
Well, even Idearc’s Chief Executive, Scott Klein, has been paraphrased by the Wall Street Journal as saying “Everyone was aware that ‘$9 billion was really more debt than this business could bear'”. So, Idearc was spun off with a majority of this debt from Verizon from the start – clearly set up to fail.
So far, I’ve seen maybe three different law firms filing class-action lawsuits against Idearc and its executives, based on the premise that the stock tanked due to them secretly changing policies, resulting in inflated-looking sales on the books for businesses with higher likelihoods of not paying for contracted advertising. But, I think the real culprit in all this is likely Verizon – they pushed off a part of the company with an untenable debt load, in large part to pay off debts incurred by Verizon FiOS (Verizon’s fiber optic network) expansion.
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Posted by Chris of Silvery on 06/22/2009
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Filed under: General, Local Search, Market Data, News, Online Directories, Yellow Pages bankruptcy, chapter 11, directories, idearc, idearc bankruptcy, idearc chapter 11, Idearc-Media, iyp, Phone-Books, superpages, telco, telecomm, Verizon, Yellow Pages
Superpages.com Adds More User-Generated Content to the Local Mix
About a week ago, Idearc announced that Superpages.com had introduced more user-content features.
Previously, the primary component of user content on the site was limited to user ratings and reviews associated with business listings.
Some of the new features this recent upgrade added include allowing all users to enhance basic biz profile information, uploading pictures of organizations, wiki-like biz listing “blog” features which could allow simplistic blogging by businesses and/or could be used as a consumer comment or Q/A zone for each business since any user could submit info to them.
Of all the top online yellow pages and local search sites, I believe that Superpages may now have the distinction of having the greatest (more…)
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Posted by stephan of stephan on 11/14/2007
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Filed under: Design, Local Search, Market Data, News, Online Directories, Social Media Optimization, Yellow Pages idearc, Internet-Yellow-Pages, iyp, Local Search, superpages, Yellow Pages
Superpages Launches New Redesign
I noticed that my old company, Idearc Media, just launched a major new redesign today for their primary web property, Superpages.com:
Read on for a few of my comments about it.
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Posted by Chris of Silvery on 04/27/2007
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Filed under: Design, Local Search, Yellow Pages idearc, Local Search, superpages, Superpages.com, Yellow Pages
Superpages to Factor CTR into Ad Rankings
I noticed that Greg Sterling just reported over at Search Engine Land that Idearc Media’s Superpages is going to begin factoring in ad click-through-rates into the measures used for ranking ads on the vast networks of sites where Superpages content appears. I was aware of this plan prior to my departure from Superpages, and I think it’s one of the cooler things my old teammates are developing.
Naturally, this follows other major ad networks who do similar things. Google, for instance, has begun using quality scores to decide ad rankings and the pricing of the ads.
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Posted by Chris of Silvery on 04/26/2007
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Filed under: Advertising, Paid Search, Yellow Pages Ad-Rankings, Advertising, CTR, idearc, Idearc-Media, Pay-Per-Click, ppc, superpages, Superpages.com
Local Search Mentions in the News
It was cool that Greg Sterling mentioned one of my projects during the last week — IdearcLocal.com (the site was previously known as “VZlocal.com”, prior to our recent divestment from Verizon Corporation):
It’s always gratifying to have one’s work get noticed!
In a less-than-glowing mention of me, David Naffziger, VP of Strategy and BizDev at Judy’s Book, was critical of my recent article on Extreme Local Search Optimization Tactics. He apparently feels that some of these tips could result in “spamming” online directory listings. I beg to differ, of course. (Not to be too pedantic, but his use of the word, “spam”, is inaccurate because spam is the mass-mailing of unsolicited email notes of a commercial nature. My posting had nothing to do with email. Heh!)
Read on for my rebuttal on this and some more local search news.
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Posted by Chris of Silvery on 02/01/2007
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Filed under: Google, Local Search, Local Search Optimization black-hat-seo, idearc, Local Search
Verizon to Spin-Off Verizon Information Services & Superpages.com
Verizon’s official announcement regarding the spin-off plans came out just a short while ago. Verizon Communications Corp. is spinning off the business unit that I work for, Verizon Information Services, and its local information website, Superpages.com.
The new company’s name is “Idearc Inc.”, and it will operate under marks of “Idearc” and “Idearc Media“:
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I’m not allowed to make any sort of forward-sounding business statements in relation to this until the spin-off is completed, due to the usual SEC rules. This is one of the common-sense limits one must place on one’s self, if one is an employee who happens to blog in one’s personal time! 🙂 (Wow! That sounded inhuman and recursive, didn’t it!) While I am an employee of VIS, I’m not speaking here in any sort of official capacity for my company, and any interpretations I place here are completely my own viewpoint. Obviously, nothing I say should be used in making stock purchase/sale decisions!
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Posted by Chris of Silvery on 10/18/2006
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Filed under: Design, Marketing, Yellow Pages idearc, Idearc-Media, Local Search, Online-Yellow-Pages, Verizon-Information-Services, Yellow Pages
