Checking In With Business.com's Jake Winebaum–After the $345 Million Deal
Was it only a week ago that we wrote a post about the sale prospects of Business.com and did a video interview with its CEO Jake Winebaum at its Santa Monica, Calif., offices?
As it turned out–and I cannot say I was surprised–the deal was finally struck this past week for the highly targeted search-and-directory site to be sold to R.H. Donnelley (RHD) for $345 million.
“Donnelley has 2,000 sales people on the street and more than 600,000 advertisers and people come to them, so they make a great fit for us,” said Winebaum to me in an interview last night. “And we have a pay-for-performance platform that is hard to build, so we make a great fit for them, too.”
There were many others in the bidding, including the New York Times, IAC and Dow Jones (owner of this site), which were all outbid by the yellow- and white-pages giant.
A sale has long been rumored (a rumor broken in The Wall Street Journal, in fact), but Donnelley–though an obvious bidder in hindsight–was never mentioned among the suitors.
The company makes and distributes paper and online directories under the AT&T, Dex and Embarq names in more than two dozen states.
The final news of the deal was first reported by paidContent here on Wednesday.
Winebaum, a former Disney online exec, will likely get a handsome payout in the buyout, in the cash-plus-performance deal, and will become the president of RHD’s interactive unit.
It will now include a new RHD local search site called DexKnows.com, and its LocalLaunch search-engine marketing service, as well as Business.com’s units.
It is all a sweet result for Winebaum especially since both he and Business.com investor and entrepreneur Sky Dayton were widely mocked–including by me–for paying $7.5 million for the domain name in 1999.
In its first incarnation as a business portal, with lots of content, it almost went belly up, but Winebaum refocused it as a search service for business–and gave it the most dull, but useful, interface you might find out there.
In essence, it links buyers of various business goods and services with merchants and those merchants pay for the links.
Another interesting part of the business is its related Work.com site, which solicits and vets content about various business issues from users (often consultants looking for business) and posts them.
Winebaum said RHD was very interested in using the platform to create things like local neighborhood guides online.
Business.com is very small in comparison to RHD, which had operating income of $442 million last year. Helped by another $10 million round of investment a few years ago, Business.com had about $15 million in earnings before interest, taxes, depreciation and amortization.
But having a strong foothold online is increasingly important to print-dependent outfits like RHD, although Winebaum insisted that the form of distribution did not matter, as long as all bases were covered.
“I want Business.com to be a long-term success,” said Winebaum, who said he planned to stay and build on Business.com’s success. “And the future is about providing leads for merchants and the right information for those seeking help, so whether they come from print or the Internet does not matter–you just have to be where people go to for information.”
I am reposting the video interview with Winebaum below, as it gives good insight into the business of Business.com: