SuperMedia announced today that CEO Scott Klein has resigned, effective immediately and has been replaced by industry veteran Peter McDonald, who was most recently president of DexOne (then R.H. Donnelley).
BIA/Kelsey understands that the company’s largest debt holders have been conducting a thorough review of the business, and this action may be one of the outcomes of this effort. Klein’s departure was announced without the usual pleasantries that mark an amicable parting. The press release announcing the change did not thank Klein for his service or mention any of his accomplishments while CEO.
Klein, who joined SuperMedia in June 2008, is best known for leading the company through its bankruptcy and name change (Idearc exited bankruptcy at the end of 2009 and was then renamed SuperMedia), and for implementing the SuperGuarantee, a program that has helped raise the profile of the SuperMedia brand. However, Klein invested heavily in promoting the SuperGuarantee. Any significant investment in Yellow Pages in the current environment creates pressure for quick results.
Klein’s is another in a series of departures as directory boards worldwide are wasting little time changing leaders when results fail to materialize. Most recently Eniro CEO Jesper Karrbrink and European Directories CEO Cornel Riklin were removed. Karrbrink was removed expressly to bring in a CEO with more experience negotiating with banks. Eniro is pursuing a restructuring of its debt and needed more expertise than Karrbrink had in that area. The company has endorsed the content focused strategy that Karrbrink had put in place, and most of the team he assembled remains in place.
Little has been said publicly about Riklin’s departure. He was recently replaced on a European CEO panel at the European Association of Directory Publishers conference in Venice by company COO Ben Legg. European Directories recently completed a process in which its primary owner, Macquarie Capital, wrote off a majority of the company’s debt.
Closer to home, DexOne’s longtime CEO Dave Swanson retired earlier this year and was replaced by Alfred Mockett, a former British Telecom executive who once had responsibility for Yellow Pages before BT spun off what is now Yell in 2000. We spoke with executives who were familiar with BT during Mockett’s tenure, and they describe him as a consummate deal-maker. The question is, if that is so, what deal is he planning to make? One obvious possibility is the combination of DexOne and SuperMedia, assuming it creates enough synergy to make sense financially.
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I think a merger is a certainty with this appointment. This will enable the two companies to creat a short term gain of cost cutting.
Doesn’t 2 bad companies combined just equal one really bad company?
Mike, yes but this will give the new combined company a bit more time to prolong their business model mainly by cutting costs.
Thanks for the comments. I think there are a few possibilities regarding mergers in the US market. Dex-SuperMedia seems the most obvious. It’s fair to say that problems don’t go away with a merger, but an improved cost structure may make addressing their challenges a little easier.
I’m almost certain that a merger between Dex One and Supermedia will happen before the year is out. Both companies are gutting their operations staff, either doing away with the work completely or sending pre-press jobs to the same outfit in the Philippines: Acer. Once the back ends are aligned and all of the operations people done away with, all that would be left is consolidating the respective sales forces and the usual fallout at the top (reducing redundancies, etc.) Too many books chasing too few advertising dollars leads to consolidation, per basic economics. The YP industry isn’t exactly cutting edge tech either – phone book usage is only going to decline as phones get smarter and as high speed Internet service spreads to the hinterlands. I’d say it’s a sure thing at this poing.