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This just in. Directory publisher R.H. Donnelley has acquired, a B2B-oriented search engine and ad network that was acquired by Earthlink founder Sky Dayton for US$7.5 million in 1999. The acquisition was announced today, just before RHD’s second-quarter earnings report. Here is a copy of the release.

Here is an article out this morning that reports the purchase price was around US$350 million, driven up in a competitive auction that featured bids from IAC, New York Times, Dow Jones and News Corp.

This, plus the recent relaunch, suggests RHD is going all out to accelerate development of its online business.

Here is a copy of the 2Q earnings announcement. The headline is that ad sales were up 0.2 percent in the second quarter. We will have a more detailed recap of the results later.

Update: Much was discussed on the deal. Executives were asked why RHD acquired for US$345 million rather than partner with an existing platform (presumably CEO Dave Swanson responded by saying RHD “wanted to control our PBA [performance-based advertising] platform.” And he added that in acquiring, the company also netted a number of core competencies that it needs to compete in PBA and search, and “thought leadership” in the form of CEO Jake Winebaum and his team. Winebaum will become head of RHD’s interactive unit.

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  1. Call me a contrarian but this is NOT a good deal for RHD. has almost “0” organic into, meaning almost no one ever goes to without getting there through search marketing or arbitrage. The site,, is essentially a domain parking site with adsense all over it. It’s hardly a strong internet company or site. Bad move as your first big play in the space.

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