Verizon to Buy MCI for US$6.6 Billion
In case you haven€™t noticed, another round of consolidation in the U.S. telecom space is well underway. In one sense, it means less this time around to the directory business than it did the last. When SBC buys AT&T, or when Verizon buys MCI, there are no directory organizations to bolt together €" one party has a publishing business and the other doesn€™t.
In another sense, the impact could be more profound that in the last wave back in the late 1990s. As SBC absorbs its acquisition of AT&T, and as Verizon does the same with MCI, the two companies may look to €œnon-core€ assets as sources of cash. We believe SBC has resisted this temptation because it loves the cash flow of directories and hasn€™t had a good reason to let go of the business. Until now, perhaps.
Verizon has certainly enjoyed the cash its directories unit provides, but the recent pattern of sell-offs in Europe and Canada suggests that corporate leaders are comfortable with disposing of directory assets if it makes sense for the business.
Add it all up, and the evidence is building of a possible fresh round of directories sell-offs, or more likely partial sell-offs.
This Post Has 3 Comments
Maybe they will be forced to sell their YP division. This is the time; print will only continue to decline (over the long term) in revenues unless there are some radical changes
Did anyone see the lack of enthusiasm in AT&T's CEO Dave Dorman's on camera remarks at the AT&T/Pebble Beach National Pro-Am yesterday? CBS only gave him about 15 seconds and he stumbled through those.
You can bet that next year the golf tournament will be sponsored by SBC and Ed Whitacre will be making the comments.
If one of these guys begins to sell pieces of their Yellow Pages cash cows, they are likely to link each piece to the associated low margin wireline business and sell it as a package.