InfoUSA, is seems, is on a mission to consolidate the list management and brokerage industry. The Papillion, NE-based proprietary database compiler announced its acquisition of Hackensack, NJ-based Mokrynskidirect in May, just seven months after purchasing another major list firm, Peterborough, NH-based Millard Group. These two list firms, along with Edith Roman Associates (acquired in June 2004) and Walter Karl (acquired in March 1998) are now part of infoUSA’s Donnelley Group subsidiary.
Those aren’t the only companies that fall within the Donnelley Group, however. Donnelley president Ed Mallin also oversees e-mail list business Yesmail (acquired in March 2003), consumer database and data processor Donnelley Marketing (acquired in July 1999), research arm OneSource (acquired in June 2004), and direct marketing group Catalog Vision, which includes recent acquisition data processing service provider Triplex (acquired in February 2004).
InfoUSA also has a second group, infoUSA Group, which consists of its directories divisions: Business Credit, Internet and Telemarketing, American Church Lists, American Medical Information, Government and Reference, infoCanada, List Resellers, and AutoList USA.
Founded in 1972 by chairman/CEO Vin Gupta the $383 million company has more than 600 employees, including 200-plus account executives who call on Fortune 1000 companies. InfoUSA compiles and updates a proprietary database of 14 million businesses and more than 220 million individuals in the U.S. and Canada.
Access to resources
Multichannel merchants are no stranger to the benefits of mergers and acquisitions: operational efficiencies, marketing synergies, greater share of wallet. Mokrynskidirect president Dennis Bissig refers to the same benefits when discussing infoUSA’s acquisition of his firm.
“We are now with a real strong company with excellent growth opportunities,” says Bissig. “Now we also have a lot of tools at our hands, like Yesmail, to add to what we are already doing.” Bissig will now report to Mallin; Mokrynskidirect owner/founder Don Mokrynski will remain with the company as a consultant.
The benefit for a firm like Mokrynskidirect, Mallin says, is the ability to have more resources at its hand while running as an autonomous company. “Some of these companies probably feel that the opportunity of being acquired by infoUSA can help them become more competitive.”
Those benefits have helped Edith Roman grow, says its president, Stevan Roberts. For example, not only does Edith Roman get to use the parent company’s proprietary database for free, but its clients don’t have to stand in line for it either.
Roberts adds that Mokrynskidirect, as part of a larger company, will also have better buying power for capital expenses such as computer and office equipment through infoUSA’s vendors and will save money as a result. And with infoUSA’s financial backing, Roberts continues, Edith Roman has been able to launch products that he hadn’t dreamed possible, such as its Business Response Alliance Database (BRAD), which went live in September 2004.
“It’s incredible how far we’ve been able to come in the two years we’ve been owned by infoUSA,” Roberts says. “Our clients see that partnership with infoUSA as an advantage, and we’ve been able to leverage that for them.”
In terms of sheer number of lists, infoUSA’s Donnelley division far outpaces the competition. Geoff Batrouney, who is a shareholder of InfoUSA as well as the executive vice president of New Rochelle, NY-based list and marketing services firm Estee Marketing Group, notes that as of May 31 the four Donnelley Marketing divisions accounted for 4,191 list and insert media properties: 1,587 from Edith Roman and its ePostDirect division, 1,307 from Walter Karl and its Walter Karl Interactive group, 993 from Millard, and 304 from Mokrynskidirect. In contrast, Greenwich, CT-based Direct Media, one of the largest privately owned firms, manages 1,273 lists and brokers an additional 1,186.
“That’s a staggering number of properties,” Batrouney says of infoUSA’s supergroup. “I don’t think [the list industry] will ever have anything as major as the equivalent of a Ford Motor Co. or a General Motors under one roof, but as a shareholder I’m certainly watching closely.”
Bigger — but better?
The auto-industry metaphor speaks to what some say could be a problem for infoUSA: Bigger isn’t always better, especially in regard to service. Not surprisingly, executives at smaller list firms contend that the customer experience will suffer as more stand-alone firms become subsumed.
“InfoUSA purchased a fantastic organization in Mokrynskidirect, and I can understand why they would want to target them,” says Jay Schwedelson, corporate vice president of Boca Raton, FL-based list firm Worldata. “But as a part of infoUSA, Mokrynskidirect is not going to be able to provide the same hand-holding as they may have. Their clients are now one of hundreds, if not thousands, that they are dealing with. A smaller firm — and there are more than 1,500 unique list companies that make up our industry — can still cater to their clients’ needs.”
John Papalia, president/CEO of Danbury, CT-based list services firm Statlistics, echoes Schwedelson, adding that the industry was built on hands-on service. “Is this the direction we want to go?” asks Papalia.
But both Mallin and Bissig say that Mokrynskidirect’s focus on service isn’t going anywhere after the sale, any more than that of the Millard Group did after its acquisition. Bissig says Mokrynski would not have sold to infoUSA had it not been for the positive things heard from Millard. “Everything we’ve seen with Millard Group has been positive, and we expect the same. We certainly watched them closely,” Bissig says. Like the other group presidents who report to Mallin, Bissig will run his company on a day-to-day basis and be responsible for his own operations and profit and loss statements.
Mallin points out that infoUSA retains the management of the companies it acquires precisely because it understands the importance of personalization and client relationships in the industry. It’s also why the company names have been maintained.
“When companies like Edith Roman, Walter Karl, Millard Group and Mokrynskidirect have been pioneers, and you acquire them, the idea is to leverage their brand name,” Mallin says. “These companies have invested tons of money in promotions, advertising, and people power, and maintaining the brand identity and culture is important.”