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  • notsaramathew notsaramathew Aug 1, 2012 4:56 PM Flag

    Exploring sale...

    I don't think you can gauge the business by comparing to Moody's. A better fit is to compare to Experian and Equifax. I see two non-financial issues:

    (1) IF management had: (a) confidence in itself and (b) believed there was a path to growth by taking the company private then they would take the course of a management led buyout. Management doesn't see a path, however.

    (2) 3 concurrent trendlines have converged to put the company past the tipping point of being able to dig itself out of a hole: (a) Net decline in customers (annual lost customers > annual new customers) ==> declining opportunity to upsell, cross sell and grow through price increases; (b) declining investment, bad investments (Purisma) and a reliance on Financial Flexibility (fewer employees) to drive short-term results have left the company with no path to accelerate growth.

    Evidence abounds of a lost company:
    (a) How could they miss the need and opportunity to include email contact info on the marketing side?
    (b) The sale of SAS and buyback of Australia was clearly a play to change growth % off a lower base at a high cost.
    (c) How could a company that sells B2B prospect information NOT see that it wasn't doing any B2B prospecting? How could it NOT know that they could not continue growing without looking for new customers? (listen to the last earnings call -- it was a revelation that they could hunt for new customers.

    There is no hope. During the Loren era D&B outperformed the S&P and EFX every year he led the company. During the Alesio era they were 4 out of 5 and positive overall. The Matthew era is 0 for 2 and negative overall. It has become an empty bag; a story of "what could have been."

    But blindly following Alan's Financial Flexibility (annual layoffs, good times and bad) as the ONLY strategy that was consistently executed, for over a decade, has left the company essentially where it was 5-10 years ago, with a fancier interface (DNBi) on top of a lesser product (the data).

    One can only hope that they CANNOT sell and that a new outside regime (but keep Mr. Conti, the only able-minded leader of the bunch) will replace the blind leading the blind.

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    • Experian and Equifax are the primary competitors, but D&B has a broader scope of business insight. The other competitors are just starting in the commercial space as their primary focus is on consumers.

      D&B's biggest mistake was that they sold off Moody's, Dataquest and others. This was Loren's way to make a quick buck. They've continued to flex out a lot of great people, but probably should have looked at more senior level leadership.

      I guess the new idea is that if you can't make a quarter then you sell out and make a quick buck for the upper management and to hell with the rest. That's Sara's way.

95.45+6.11(+6.84%)Feb 12 4:02 PMEST