My colleague Michael Taylor and I spent part of this week in London, making the rounds among some of the key players in global directories based in that wonderful and surpassingly expensive city (sorry, kids, no souvenirs). One of our last calls was to see Andrew Day, CEO of Truvo (ex-World Directories), who walked us through his company’s perspective on the recent deal with rival European Directories to consolidate the Dutch directory market, as well as a discussion of Truvo’s commitment to selling print and online directory products through distinct sales channels.
The deal to consolidate the Netherlands directory market has Truvo exiting the Netherlands (assuming regulators approve the deal next year) and European Directories rolling up the two brands, Gouden Gids (Truvo) and DeTelefoongids (ED), into a single directory platform. The two publishers have fought a bitter battle for market share over the past several years.
We used the opportunity of our meeting to ask Day about the deal. Essentially he said the Dutch market is increasingly online focused and more suited to a single print publisher. He noted (in a point echoed to us by European Directories) that research among Dutch SMBs supported the idea of a consolidated market (one print buy instead of two to reach the same coverage), and the Dutch business press has largely supported the idea of consolidating print into a single entity.
Day’s company is owned by the private equity firms Apax Partners and Cinven. And as Day noted, “Private equity is very pragmatic.” In other words, Truvo’s owners did not see the sense in continuing a bitter fight in the Netherlands when investment might yield better results in other markets.
One example is Portugal, where print revenues have been in steady decline, but Day says strong online growth means that market will see net growth in 2008. He did not rule out other acquisitions in the future. South Africa, a market in which Truvo is a minority owner of Telkom Directories, is one possible acquisition. Day says that otherwise Truvo is focused on opportunities in Europe.
Regarding Truvo’s decision to use separate print and online sales channels, Day said the approach is “right for where we are today.” However, he did not rule out changing the model in the future if the company’s needs or the dynamics of the market change. For now, he says, the approach works. One key is to have sufficient time separation between the print and online sales calls, so the two channels are not selling over each other or annoying the advertiser with multiple sales calls.
Finally, we asked Day when he expects his company, which now has about 23 percent online revenues, will have half or more of its revenues coming from non-print sources. “Within five years is not unrealistic,” Day said, adding, “I would welcome it.”
Day also hastened to add that he doesn’t want to reach 50 percent online revenues by accelerating the decline in print. Still, he made it clear that he sees all his company’s future prospects for growth inexorably linked to its prospects online. And this helps explain why Truvo does not want to spend its resources fighting a war of attrition in print in the Netherlands when there are other battles to wage that could produce greater strategic advantage for Truvo.