BusinessWeek has an interesting take on the benefits of spin-offs, which is apropos given the likelihood that Verizon will go the spin-off route with its Information Services directory publishing unit.
A BusinessWeek study conducted by Dealogic found that " …the six big companies that announced spin-offs in 2005 and completed them by the first week of 2006 saw no big run-up in shareholder value as a result." The magazine found that the six companies (American Express, Dean Foods, Fortune Brands, Viacom (VIA ), Liberty Media and Clear Channel Communications) generated the same 3 percent return as the S&P 500.
One reason given for the disappointing results was that these spin-offs may have been perceived as "financial engineering" rather than strategic responses to threats from the Internet. Will this issue haunt Verizon? Probably not, since one of its objectives is to raise money to further its investment in building a digital network. Also, the balance of experience suggests directory organizations fare better as stand-alones than under the ownership of telecoms, particularly those with strategic objectives well beyond owning the local telephone exchange.