William L. Davis - Donnelley's Number-one Son
One non-print area that looks promising is the Internet. One popular Internet product, SENDD (secure electronic net document delivery), comes from the financial printing division.
SENDD allows clients to manipulate their files behind R.R. Donnelley's firewall. Users download their digital documents, work on them, then upload the revamped files. In the future, SENDD will even permit online editing.
Despite the success of SENDD and other Internet-based products, R.R. Donnelley has decided to tread the World Wide Web cautiously. Rather than unleash a wave of products in the hopes that some will float, the company will slowly launch Web services that fit into its overall strategic plan. Davis believes that printers in a rush to surf the 'Net tend to wipe out.
"A problem that companies generally have is grabbing onto a big, new idea and never executing it well because it's too big to get your hands around," he explains.
Speaking of big, printing companies don't come much bigger than Donnelley. And Davis doesn't want to get smaller. Does that mean the $6.5 billion behemoth will take part in the consolidation craze? Possibly.
Unlike the industry's other now-famous Davis, R.R. Donnelley's chief is in no hurry to purchase other printers. Consolidation may be natural for a mature industry, but not for R.R. Donnelley & Sons. Not yet, anyway.
"You have to look at the printing industry overall," Davis explains. "Our industry does not earn the cost of capital. From that standpoint today, this is not a terribly attractive industry in which to invest. And an acquisition that we would make would obviously have to provide a clear path toward a strong return for our shareholders."
Davis is quick to add that he doesn't disapprove of M&A activity. He's just waiting for "the appropriate time." Expect acquisitions from R.R. Donnelley—eventually.