Kelsey-veronis

Nick Veronis: What is the view from a venture-capital perspective?

Kelsey's setup for Nick Veronis, managing director of Veronis Suhler Stevenson: How is the VC and financial community looking at local services? Veronis has been involved in key local media and commerce deals. He explains where the value is today, and where he thinks some of the hot categories are going forward.

NOTES OF VERONIS' talk on Tuesday afternoon:

VSS is a late-stage buyout firm. Have invested in broadcast, cable, yellow pages, newspaper companies on the print side. They haven't focused on hit-driven areas like music publishing. They have 33 investment professionals, and a small London office; they invest about one third of their money in Europe.

Veronis' key investment srategy: "How can we take traditional media assets and put them in the hands of the new guard . . . it's easier than ever to build a company with a small amount of money . . . what we are looking at is maybe there are ways to take traditional media assets, buy them, and put them in the hands of the new guard."

Print-to-web advertising datapoints

Some of their datapoints on web local advertising:

• They estimate there was $2.6 billion of newspaper website advertising online in 2006.

• Internet Yellow Pages -- $1.2 billion, of which $800 million is directory publishers.

• TV websites -- $400 million

• Local search and internet pure plays (including Monster, HotJobs) $2.1 billion

Will $26B in offline media go online?

The key question: How much of $26 billion in offline media today will translate online and how much of it will go dollar-for-dollar?

He cites a Borrell Associates report from last year that said for every dollar of print advertising that a metro newspaper loses, they will see a nickel or dime recycled back to their website. And for every print subscriber they lose -- worth $500-$800 in revenue -- they need to get 30 to 100 unique monthly visits to make up for that. Bottom line: Not all print dollars will remain after conversion to web.

"And by the way if that happens, the big beneficiary is the advertiser," says Veronis. "I don't think that is a dollar-for-dollar transfer, at least it certainly hasn't been in classifieds."

"I think the idea of these prefabricated commercials for the local advertiser is a great idea -- sort of like the Charles Schwab for the local advertising world."