The Market

Classified directories are a widely used and highly effective form of advertising.
- Classified directories are simple to use, and are frequently used by a wide variety of consumers and businesses to search for a broad range of products and services.
- Because most directory users have already made a decision to purchase, or at least are seriously considering purchasing, a product or service when they use a directory, we believe that classified directory advertising frequently has a higher probability of leading to a purchase than other traditional forms of advertising such as direct mail, telemarketing and television, and thus represents a cost-effective solution for advertisers.

Virtuous circle model.
A key characteristic of the classified directories business is the "virtuous circle'' model. In this model, the greater the number of advertisers that advertise in a directory, the more useful it becomes to users. Users refer to the directory more frequently in their search for a supplier, which in turn provides more leads, and therefore better value, to advertisers, who are thus encouraged to pay for more advertising. Publishers facilitate this process by promoting the use of directories, and brand reputation grows as a result, which in turn contributes to increased usage and advertising.

Valuable form of advertising for small and medium-sized enterprises.
Given the effectiveness and “value for money'' of classified directory advertising compared to other forms of advertising, it is believes that a large number of small and medium-sized enterprises view classified directory advertising as a very valuable form of advertising which forms a significant part of their marketing budget.

Strong financial characteristics and resilience in an economic downturn.
Given the characteristics described above, once successfully established, classified directories businesses, have historically been characterised by strong cash flow generation, relatively low ongoing capital expenditure requirements after business start-up and a relatively stable advertiser base. In addition, given the importance of classified directory advertising to a broad and relatively stable base of small and medium-sized enterprises and the low exposure of classified directory advertising to cyclical advertising, such as offers for employment, automotive sales and property sales, it is believe that the classified directories business is more resilient to economic downturns than other forms of advertising.

It is believe that the following industry trends are important in evaluating our growth potential

Continued growth potential in the United Kingdom & Ireland.
The UK & Irish directories sector has experienced continuous growth during the past ten years. It is believed that the sector will continue to grow and that this growth will be driven primarily by increased volumes. Turnover growth in the sector is expected to be achieved as penetration among the potential advertiser base of small and medium-sized enterprises increases, as existing advertisers increase their advertising spend on additional or larger advertisements, and as the result of the introduction of new product offerings.

New Technology
Expanded revenue opportunities through advances in technology. Most participants in the classified directories industry have expanded beyond their traditional printed directories business and are delivering directory content and services through a broader range of media, including fixed and mobile internet and voice telephony. It is expected that this trend will continue and that the directories market will grow as new media forms are introduced and improved and as users become more familiar with these new technologies.

Increased opportunities for Expansion.
As telecommunications companies in Europe continue to divested their classified directories businesses, the result is believed there is potential for further expansion and development in the industry.