BAPCO showed stronger revenues in both the first and second quarters than it had in 2004. Verizon's earnings increased even as its revenues declined. As a result, Verizon's operating margins climbed from 45.9% to 47.3%. While SBC's margins declined, they remain the highest among major incumbent publishers. Year-to-date revenues for the big three have declined less than The Kelsey Group anticipated incumbents would fall for the year (-0.7% vs. -1.2%).
We do not anticipate much change in the remainder of 2005. IYP/local search sales by these companies are gaining traction and the Bells are able to make price-ups stick. We might change our tune when and if we see a major decline in revenues, but that doesn't seem to be on the near-term horizon.