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Yellow Pages Directories Facing Extinction

The yellow pages industry is in deep trouble, and growing online revenues may not be enough to save it, according to The Wall Street Journal. Consumers are increasingly use sites like Google to find the information they need, and "now, the economic downturn is sending the already ailing business into a tailspin."

Indeed, with small online audiences and slowing growth, online revenues will not be enough to offset rapidly declining print sales for most yellow pages publishers. The Journal points out that too many directory services are vying for the same local business ad dollars. Because of this, none of them has a comprehensive roster. Meanwhile, in the face of a weak economic outlook, small businesses are drastically cutting back on their ad spending.

According to Wachovia analyst John Janedis, yellow pages spending, both print and online, will fall 6.3% next year, more than double the expected rate of decline for broadcast television. Borrell Associates projects that in the next four years print ad spending will fall 39% for yellow pages publishers. Faced with such prospects, the Journal says some of the biggest publishers, which have considerable debt, are slashing jobs, scrapping dividends and exiting unprofitable markets. Shares in R.H. Donnelly and Idearc, for example, have fallen 99% this year.

Read the whole story at The Wall Street Journal »

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