Business.com web site sold for $350 million

The Wall Street Journal’s Dennis Berman writes Thursday that the web site www.business.com has been sold to R.H. Donnelley & Co. for an estimated $340 million to $350 million.

Berman wrote, “The Santa Monica, Calif., company has cash flow — of about $15 million — that will be but a minuscule portion of Donnelley’s 2006 operating income of $442 million. Traditional publishers are nonetheless willing to pay top dollar for Web-based businesses, given their overall growth rate and the wider consumer shift to Internet habits.

“For that reason, the company was pursued by companies including Dow Jones & Co., publisher of The Wall Street Journal, and New York Times Co., which lost out in the auction conducted by Credit Suisse Group.

“Some have begun to question the viability of paper phone directories. Earlier this year, Microsoft Corp. founder Bill Gates predicted that ‘yellow-page usage amongst people…say, below 50, will drop to near zero over the next five years.”

Read more here. Cary, N.C.-based R.H. Donnelley is primarily a publisher of Yellow Pages directories.