About YP Holdings LLC.

YP Morphs into a Digital Media Alligator
January 28th, 2013 by Gordon Borrell

It seems odd, but if you want a shining example of successful local media transformation, look to a yellow pages company.

One by one, the stodgy old directory companies are disappearing.  Gone are AT&T Yellow Pages, White Directories, Yellowbook, Verizon Superpages, and Donnelly Directories. Replacing them are leaner, digitally focused companies renamed YP, LocalEdgeHibu and Supermedia.  While other local media companies struggle to get more than 10% of their local ad revenue from digital sales, these companies are above 30%.  LocalEdge (formerly White Directories, owned by Hearst) is above 50%.

YP, formerly AT&T Yellow Pages, stands head and shoulders above the rest. In an age when fallout from the digital comet is suffocating the biggest media reptiles, YP has morphed into an alligator.

David Krantz

(CEO David Krantz will detail YP’s transformation at the 2013 Local Online Advertising Conference in NY March 4-5. Click to see Agenda.)

YP initially struggled with the Albatross of an old print-based business model and a profit margin to protect.  It’s the same dilemma faced by newspapers, TV, radio and direct mail companies. When they are forced to protect profit margins and are lulled into thinking their existing business managers can manage both analog and digital ventures, they falter. They don’t morph. They mediocritize.

A year ago YP transformed from two separate companies – AT&T Interactive (the digital side, operating Yellowpages.com) and AT&T Advertising Solutions (the print side, operating hundreds of directories) – into one.  Today, YP is one the largest local advertising companies in the U.S. with $3 billion in ad revenue – bigger than all of Gannett’s newspaper operations.  Roughly $1 billion of it comes from digital products, making YP the second-largest locally based online advertising company, just behindAutotrader.com.  (Read about Autotrader’s next disruptive plan here.)

At the helm is David Krantz, perhaps the most digitally savvy CEO in the local media business.  In 2012 he helped guide the newly formed company, owned by AT&T and a new investor, Cerberus, to a critical decision: Don’t focus on profits; focus on the longer term.  “Our goal,” he told me recently, “was not to harvest out the cash.  There are a lot of easier ways to earn a 15-20% return on your money.  This is atransformation play.”

How is YP making the transformation from a print company, to print+digital, to an integrated company?  One of the key ingredients is a new set of people who aren’t indoctrinated by the old business model. “We’ve been able to attract really great people,” David said, “because they’re excited about the transformation and the vision.”

Krantz said people want to believe they’re working toward something meaningful.  Something noble.   YP’s vision is simple and brilliant:  “We want to help local businesses and communities grow,” Krantz said. So there you have it.  YP is helping communities.  They’re not intent on being the No. 1 news and information source, or the most-trusted source of news.  They aim to help local SMBs and communities grow.

It’s a fascinating story – so fascinating that I’ve asked Krantz to outline that transformation, and how it’s folding out at YP, during our 2013 Local Online Advertising Conference in March.  Click here to see the agenda.  This year’s theme is “Meet Your Disruptors.”  Had they followed a different path, the AT&T Yellow Pages folks would be sitting in the audience, learning how they’re being disrupted.  Instead, they’ll be on stage as YP, the disruptor.

 

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