The Praized Blog

Just bumped into a friend while checking in at the hotel of the Kelsey Group Conference. He tells me Infospace has just sold Switchboard.com to Idearc (Superpages). Turns out Infospace has sold its whole online directory business to Idearc.

Excerpts from the Reuters article:

InfoSpace Inc said it agreed to sell its online directory business, including Switchboard.com, to Yellow-pages directories publisher Idearc Inc for $225 million in cash.

“What we did here was pick an asset that really the market was not valuing at all and turned it into real cash,” Bellevue, Washington-based InfoSpace’s CEO Voelker said by phone.

The 47 employees in the directory business are going to be offered jobs in Idearc, Voelker said.

The online directory business contributed about $17 million to the company’s first-half 2007 revenue of about $157 million.

The Kelsey Group blog has more info.

What it means: traffic consolidation. Superpages.com continues to build its online reach and frequency through this acquisition.

1) My friends at the Kelsey Group just released their 2007 Global Yellow Pages report. It’s always excellent information and worth the purchase.

Highlights:

• In 2006, worldwide, Yellow Pages generated estimated revenues of US$30.5 billion and estimated earnings before interest, taxes, depreciation and amortization (EBITDA) of US$13.6 billion,
• By applying a conservative multiple of 10 times EBITDA, the entire global Yellow Pages industry would have a market valuation of US$136 billion.
• The global Yellow Pages industry employed just over 74,000 people in 2006, more than 41,000 of whom worked in sales or sales management, up from 36,000 in 2004.
• Print Yellow Pages will stay level globally over the next five years.
• By 2011, almost 30 percent of global Yellow Pages revenues will be online, compared with 12.4 percent in 2006.
• Yellow Pages share of the total global advertising pie stands at 7.1 percent.

2) My friends at illumiCell just signed a distribution deal with Idearc that allows the Texas publisher to place its Superpages.com advertisers’ content on an instant messenging local search service provided by illumiCell. Under this agreement, Superpages.com’s performance-based advertisers will be featured over AOL’s Instant Messenger (AIM) network. The illumiCell local search service will launch on AIM in the United States in the third quarter of 2007. illumiCell already has a partnership with Yellow Pages Group in Canada.

(via Wired)

London-based Geomas filed suit (.pdf) late last year against Verizon Communications and its spinoff Idearc Media in a Texas federal court, alleging their Superpages.com search site infringes upon patent No. 5,930,474, for an “Internet Organizer for Accessing Geographically and Topically Based Information.” Last month, U.S. District Judge T. John Ward ruled the case could proceed to the discovery phase.

The patent describes an internet search functionality in which users can locate a topic or business based on their location. If you’ve ever looked for a nearby doctor or plumber online using your ZIP code or city, according to Geomas, the site you used likely infringed upon the patent. “In a perfect world, we commercialize the technology and grab licensing fees,” said Jason Galanis, founder of Geomas, which was formerly called Yellowone Investments. “We aren’t necessarily looking to sue as our main business, but realistically I think that’s going to have to happen.”

If he’s right, those sites could be forced to pay, or shut down their local search services. Geomas could rake in hundreds of millions of dollars in the process, and as search stalwarts see more local and map-centric search traffic and advertising revenue, the Verizon suit could be just the tip of the legal and licensing iceberg. Galanis said he’s raised $20 million to support the venture and is attempting to arrange licensing meetings with at least 20 firms Geomas believes infringe upon the patent.

The patent appears broad and obvious today, but was filed in 1996, before internet search became so commonplace. Roughly 100 companies, including Verizon, cite ‘474 as prior art in their own patents. Unlike many of those other companies, however, Geomas hasn’t created a working technology based on the patent, which Perkins said could give defendants an advantage in court.

What it means: as the Wired article says, the patent appears quite broad and obvious. I am not a lawyer but I definitely invite everyone running a local search site to take a look at the filing and follow this one closely. I’d love to know what my friend Greg thinks (as he used to be a practicing attorney).