The local paper directory business is shrinking rapidly. Consider Yell Group, which publishes Yellowbook and describes itself as “a leading international directories business operating in the classified advertising market through print, online and phone-based media in the United Kingdom, United States, Spain and Latin America.” The Yell Group’s presentation of financial results for the first half of accounting year 2009 (April through September, 2008) doesn’t describe an imminent business crisis. Yell Group’s stock, however, has declined precipitiously across calendar year 2008 and is now trading about 14% of its value at the beginning of 2008.
The Yellowbook for Alexandria City, Arlington County, and Fairfax County, Virginia, indicates a major directory advertising contraction. The main business components of the directory are yellow pages (classified business advertisements, customized advertising texts and graphics), white pages (alphabetical business listings, no advertising text, but some paid block size and color levels), and coupon pages (10 standard-size coupons per page). The “2008” Yellowbook had 1546 yellow pages, 303 white pages, and 40 coupon pages. The “2009 2010” Yellowbook has 1162 yellow pages, 260 white pages, and 28 coupon pages. Most of the directory’s advertising revenue undoubtedly is from the yellow pages. Thus this directory’s advertising revenue has probably fallen by more than 25%. If the directory is for two years, compared to the previous one-year directory cycle, then the undiscounted two-year advertising revenue is down by more than 63%. Remember that this has occurred just in the beginning of what is likely to be a long and deep macroeconomic contraction.
My apartment building hints at the business problem. The building has 11 occupied apartments, excluding mine. About two weeks after a stack of Yellowbook directories were deposited outside the entryway, 9 books remained. This remaining stack of Yellowbooks disappeared shortly thereafter. I guess that the condo maintenance person threw them out. Thus perhaps only 2 out of 11 residents (plus one communications industry economist) even was interested enough to pick up the directory.
Rapidly shrinking local paper directories are a sign of the enormous change that the Internet is fostering.