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Business.com Sold for $360,000,000
July 26th, 2007 by 
Jay Westerdal
We covered this story as it went up for sale earlier this year. The Wall Street Journal is reporting that the sale just happened. The final purchaser is R.H. Donnelley who bought Business.com to increase their influence of the Internet in the yellow-pages and white-pages business, which publishes paper and online directories in 28 states under the AT&T, Dex and Embarq names, among others.
The Dow Jones and the New York Times were both bidding on the company. The sale was expected to close between $300 to $400 million. So the price was right on target. Business.com currently brings in about $15 Million dollars a year in revenue. So the sale was 24 times earnings. This is a rather high price for a company but generally bigger companies sell for a higher multiple. 24X is very healthy. If a company is able to demonstrate $1 Million dollars in revenue that would make it worth about $24 Million according to these numbers. However, smaller companies sell for a smaller multiple. Generally between 8X to 15X. Now you can see why 24X looks so good for this company. One could argue it was the domain name that made it so valuable.
The parent company has revenues of $442 million and has a market capitalization of $9.67 Billion. R.H. Donnelley’s stock currently trades at nearly 22X their current revenue. This purchase is right in line with the value of their stock so it is a good purchase from my perspective.
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Posted in Domain Sales |
July 26th, 2007 at 4:57 am
That was a great sale.I wish it was my earthlocations
July 26th, 2007 at 5:31 am
I think the 24x earnings is a bit deceiving. R.H. Donnelley will acquire 6,000 advertisers and be able to cross sell to them, so they should be able to make this more like a 7x-10x acquisition if they execute.
July 26th, 2007 at 8:19 am
I guess you have to have a lot of money to make more money
I hope they can make the best out of this purchase.
/Andreas
July 26th, 2007 at 9:32 am
Is this 24x earnings, or 24x annual revenue? I seem to recall seeing a lot of ads for Business.com on other search engines….
July 26th, 2007 at 11:40 am
good read. but i read that business.com is on track to do $50mm in revs in 2007.
arik - dnsstuff