When a company as large as Verizon decides to shed its directory business, a reliable source of cash for so many years, questions inevitably arise over what such a move says about the future of Yellow Pages. I’ve been scanning the news coverage over the past few days, and we’ve been in the thick of it ourselves, fielding numerous press calls. Much of the coverage raises doubts about how many years the Yellow Pages product has left.
We are currently working on an advisory that will offer our take on Verizon, the decision to sell, who the buyers might be and how the deal might change the industry.
Our essential view of Yellow Pages isn’t changed much by the announcement that Verizon plans to sell Verizon Information Services, its YP unit. Verizon has made a rational decision, in our view. Clearly, directories are not a core strategic asset. And when Ivan Seidenberg talks about "unlocking value," what he really seems to be suggesting is: Let’s sell now while we can get a lot of money for this asset. The logical extension of this reasoning is that the asset could be worth less in a few years.
This is the point the press has seized on, suggesting Verizon must know something the rest of us do not. Maybe so. However, I think the rationale for selling is pretty simple and straightforward. And while it is not a ringing endorsement of the future of Yellow Pages, nor is it as damning as some would suggest. Print Yellow Pages has a future, but a limited one. A blended directional media product set (directories, classifieds, print, Internet, voice and mobile) offers a very good opportunity to those able to execute. There is still time to get it right, but, to state the obvious, not as much time as there used to be. VIS has a better shot at getting it right as an independent company.