Yellow page publishers strive to survive

by on September 21, 2012

Two of the once-booming publishers of local telephone directories, Dex One Corp. and SuperMedia Inc., recently announced plans to merge, less than three years after each emerged from bankruptcy. This leaves just two big players, since the whole industry saw steep ad revenue drops the last decade while pressured by competition from newspaper, radio, and Internet-based advertisers.

Print advertising sales for the industry declined 40% since 2005, and digital sales of this newly merged company comprise only 25% of revenues. The merger may help the debt-laden company avoid bankruptcy, again, by reducing operating costs and buying time so the new company can re-position itself to better compete in the local online advertising sector.  Both companies currently offer online search tools and ads, as well as printed telephone directories.

Neither company is new to corporate reorganization. In 2006, Dex was acquired by R.H. Donnelly Corp, while SuperMedia (formerly Idearc) was spun-off from Verizon; both companies filed for bankruptcy protection in 2009. Each company retained billions of  dollars of debt after their bankruptcy proceedings; the debts now pass to the combined entity. If a shareholder, you receive a percentage of shares in the new company based on your current holdings: Dex One investors receive a 60% stake; and SuperMedia’s investors receive 40%.

Source: Wall Street Journal: Yellow pages’ last lifeline, 8/21/12.

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