SuperMedia , Idearc, Verizon, GTE ? Reputations Don’t Fade online.

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In the past, corporations and big business developed into the mindset that you could “reset” a brand simply by changing your logo and developing a new slogan.  The mentality found within corporate America was that the average consumer had little or no long term memory. The lack of memory leads to the simple assumption that the non-digital consumer would never connect the dots with due-diligence and investigation.

The data repository now known as the world wide web has connected those dots. Companies (and people) now have a thousands of data points being historically interconnected. Stories and insight about topics of interest are no longer doomed to fade away, but are chiseled into digital stone to be remembered, recalled and renewed.

In the digital age, we know that the digital consumer is a little more savvy than the traditional consumer.

As a case example, we can look back at a well known company(s?) that has had its share of press coverage over the past decades: having gone through 4 different brands in less than a decade.

This brings us to the simple fact: Reputations Don’t Fade online.

This occurs due to the simple fact that searching for the term “Supermedia” or “Super Media” results in a results page that has 3 different pieces of content regarding the bankruptcy and transformation of Idearc to SuperMedia.

To the casual digital consumer, it is guaranteed that a simple search will expose consumers to negative brand information that causes degradation, and enough continual conversation to cause a snowball effect.

Of particular note with these brand statements is the number of ex-employees or disgruntled shareholders who feel they were not properly taken care of during the re-branding/re-structuring of the bankruptcy.

The damage, extends into a multi-billion dollar cascading effect that sets the new brand up for massive failure in the digital world. Credit rating vendors, stock analysts, potential investors and a line of other financial professionals dig deeper into freely available web archives.

The result of that financial research leads to business affecting fundamentals:
Supermedia gets junk bond rating on $2.75 bln loan

A credit ratings agency on Friday assigned a junk bond rating to a $2.75 billion loan taken out by SuperMedia Inc., the second largest U.S. publisher of yellow pages directories.

Moody’s Investors Service said SuperMedia faces challenges from a weak economy, stiff competition and companies choosing to buy advertising on a variety of platforms, not just print. SuperMedia is the exclusive publisher of phone directories for Verizon Communications Inc.

Looking past immediate stock ratings for corporate trading, we can examine the flurry of activity created by the rebranding and restructuring of a business entity. (SEE BELOW)

Of the dozens of comments, blog articles, and press releases: one of the largest segments of conversation regarding “Supermedia” revolved around employment.

  • New Jobs / Open Positions – imagine the number of job seekers who examined open positions, realized they had no idea who Supermedia was… and was quickly informed by Google search results that Supermedia was shifting jobs to India, had previously done so badly it declared bankruptcy and that previous pension holders were suing for an illegal pension switch.

Immediate Monetary Impact:

  • If we extract simple cost for recruiting new employees or retaining top talent, the impact of casual search results causes a reduction in hiring conversion for recruiters. It doesn’t take rocket science to figure out that educated workers don’t want to work at a company with a negative reputation.

Immediate Sales Impact:

In the search for digital product solutions (web marketing, search engine advertising, VOIP services, etc), should we even beg to ask what percentage of digital consumers turn towards the internet to research products/services before they buy? (*Depending on product category, the percentage ranges from 35% to 87%)

For every sales person at SuperMedia selling the products and services of the company, they will discover a 35% to 87% negative sales impact for every single conversation they have with a business prospect.

As digital consumers, some of the additional examples of items in search results around the new brand create a scene dominated by consumers, ex-employees and industry reviewers. Here are some examples:

SuperMedia – an interesting speculation

As an owner of the Idearc unsecured bonds, I received some cash plus shares of the new SPMD stock. For every $1 million in par value, the payout was $41,988.50 in cash plus 789 shares of SPMD.

Idearc Exits Bankruptcy as SuperMedia

Yellow pages publisher Idearc has emerged from bankruptcy protection with a new name, SuperMedia, but a continued belief in the future of its print business.

SuperMedia ships jobs to India, but Scott Klein got his bonus

SuperMedia sales reps were instructed by management not to report cancellations or decreases in order to make sure that the crony executive team and mid-level managers qualified for the incentive payouts for the period ending pay period 13. I was very disturbed by these actions as an Idearc media consultant.

Retirees Charge Verizon & Idearc With Illegal Pension Switch

They are ducking a fiduciary responsibility to employees who gave decades of service and earned these benefits. These pension funds were set aside over the years for the benefit of employees who worked 20, 30 or more years and earned their pensions over their careers. It is reprehensible to refuse to provide plan documents so retirees can make informed judgments on the state of their pension plan and other benefits which they earned during their working years.

Is Verizon Responsible for Idearc’s Bankruptcy?

even Idearc’s Chief Executive, Scott Klein, has been paraphrased by the Wall Street Journal as saying “Everyone was aware that ‘$9 billion was really more debt than this business could bear’”. So, Idearc was spun off with a majority of this debt from Verizon from the start – clearly set up to fail

Brands Escaping Digital Reputation?

Not very likely.

What do you think?