Yell has a plan: is it enough?
Yell is a textbook case of the current times in publishing. Its poor results this week are a combination of risky acquisitions, mountains of debt and, yes, the flood of free information on the Internet.
As long as yellow pages contained the only source of information for that plumber, that pizza joint and that dentist, it was flourishing. From its origins in the USA in 1886 it flourished and is now floundering. But what intellectual property does it have now? Little apart from its classification method.
Competing against pure players
Why kill trees to provide the information which comes, seemingly, for free on the net? And how can a publisher with the length of service it has provided on paper make money from the net against “pure players” like Google?
Internet Yellow Pages revenue at Yell fell 15.7% in the final quarter of 2011. So, it is not making much headway in the new publishing world. Print and other directory services fell 22%. These are the bulk of its revenues: 91%. It also has digital services which more than doubled over the same quarter in 2010. But from a small base.
The risky acquisitions were in Spain where it bought directories in 2006. What a time to choose.
And the debt mountain of £2.6 billion was created in order to make those acquisitions.
Down, down and down
Just look at the other facts in Yell’s statement:
- Digital directory visitors declined 25.5% year-on-year;
- Print advertisers were down 17.5%; and
- Print revenue per advertiser was down 2.7%.
Yell has a plan, and, in the short term is being given room to execute that plan by its banks. But the shareholders do not see much light: Yell was a large faller in the Stock Market today.