The Fingers are walking on the Web

This is as reported in Canada by: reportonbusiness.com

I love the Yellow Pages business after spending most of my life working there. The Yellow Pages provided work for me for the past 25 years. Now its going to change and change it should to survive.. the users in Singapore are younger and more internet savvy. Web is the platform of delivery for tomorrow. And with mobile this will be even more challenging as this article from Canada suggests. Local matters is a company which provides conversion of print into internet version etc.


FINGERS WALKING ON THE WEB

There are lots of reason to love the Yellow Pages. It's a great media franchise that pumps out cash.

There's one reason to worry about phone directories maintaining their incredible track record - the domestic Yellow Pages Income Fund boasts 21-per-cent annual growth in distributable cash over the past five years - and it's that folks may let their fingers do the walking through the Internet, and somehow bypass the phone books.

Which bring us to Local Matters Inc., a software company that plans to break a prolonged dry spell in TSX technology initial public offerings.

Local Matters filed the paperwork last week for a $30-million to $40-million IPO that's led by Canaccord Capital and CIBC World Markets. The company builds the programs that run local content searches for 22 different phone directory publishers in 14 countries.

As Yellow Pages builds its online presence, our fingers will do the clicking with help from Local Matters.

The management team at this seven-year-old company includes CEO Perry Evans, who founded MapQuest and worked at R.R. Donnelley & Sons, and a number of other Internet entrepreneurs. The company is out raising money to pay down debt, rather than allow the founders to cash out.

Like most early stage tech companies, Local Matters is losing money, spilling $6.1-million of red ink in 2007 after a $16.3-million loss the previous year. So there's no earnings-per-share multiple that can be used to value this company.

But there are valuation metrics such as enterprise value to revenue - standard yardsticks back in the tech boom. Local Matters plans to sell shares for between $5.40 and $6.60 each, which will value the company at between 3.3 and 3.9 times this year's revenues.

TSX-listed software companies change hands with an enterprise value that averages 5.1 times revenues, while North American online publishers command a multiple of four times revenues. The plan is to price this IPO by June 23.