Make us your home page

Verizon phone book publisher files for Chapter 11

The publisher of Verizon phone books has filed for Chapter 11 bankruptcy protection, a victim of towering debt, a slumping economy and a declining industry.

Idearc Inc. of Dallas, which surprised many local business people this week with letters asking if they had claims to file in the bankruptcy case, will use the respite to reinvent itself for a future when even more people skip the white and yellow pages and head straight to the Internet.

The company acknowledges it "cannot continue to be your father's phone directory." But it has been hobbled by $9 billion in debt Idearc inherited when it spun off from Verizon Communications Inc. in 2006.

"Essentially, we have a company with good potential being held back by a terminally ill balance sheet," said Scott Klein, the 51-year-old former consumer-packaged-good industry executive who took over as chief executive officer last year.

Idearc, which had operating income of $926 million on revenue of $2.9 billion in 2008, said it generates enough cash to stay in business while its debts are reorganized under a judge's supervision.

The phone book business has been shrinking at accelerating speed. Between 2005 and 2007, the number of yellow pages printed shrank by 1 billion to 13.4 billion industrywide. In a plan circulated to creditors, Idearc estimates its printed book revenue will be cut by more than half to $1.6 billion between 2004 and 2013.

Managing the transition, however, has been tough. It's a business that lists business numbers free, but makes all its money charging those who want to stand out with bigger print, display ads or paid search.

In 2008, Idearc's online fielded 23 billion network searches. But revenue has only grown to $300 million, 10 percent of the company's revenue, while print ads provide the rest. Yet even by 2013, a shrunken Idearc sees about a third of its revenue coming from the Internet.

Part of the transition means cutting the 6,000 employee head count 20 percent by the end of 2009. So far 570 have lost their jobs. Idearc, which has rights to use the Verizon name until 2036, hires other companies for printing but one of its seven warehouses is in St. Petersburg.

It's quite a reversal from 15 years ago, when phone deregulation opened access to phone number lists to all. The words "yellow pages" and "let your fingers do the walking" lost their trademarks, so anybody could use them. That unleashed a flood of rivals — in some cities Idearc competes with up to eight books — selling ads that pay for 90 percent of the business. Now other big players face a similar transition: R.H. Donnelley Corp. and Yell Group, publisher of Yellowbooks.

Klein kicked off two initiatives to set Idearc's directory services apart from the other books stacked at your front door.

One is a SuperGuarantee for advertised services such as contractors, plumbers and car repair shops. Idearc promises to mediate consumer complaints with companies willing to post a SuperGuarantee "shield" on their advertised listing.

The company also initiated a business-to-business barter system. Businesses can trade services or products with those offered by other members in a swap mart in which Idearc prices goods and collects a fee. So far, 24,000 business have signed up.

Klein is refocusing the sales force to market ads to its 770,000 ad-buying businesses in all places it sells exposure: phone books, online and through its direct mail post card service.

"We intend to become more like an ad agency for small and moderate-size businesses," said Idearc spokesman Andy Shane.

Mark Albright can be reached at or (727) 893-8252.

Fast facts

Idearc/Verizon Yellow Pages

Print revenue:

2004: $3.5 billion

2006: $3.0 billion

2008: $2.7 billion

Projected 2013: $1.6 billion *

Online business:

2006: $230 million

2008: $300 million

Projected 2013:

$598 million*

Industrywide classified yellow pages printed:

Down 1 billion to 13.4 billion between 2005 and 2007.

* Project as best-case scenario, assuming economy recovers

in second half of 2009

Source: SEC and court filings

Verizon phone book publisher files for Chapter 11 04/24/09 [Last modified: Friday, April 24, 2009 10:13pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Expanded Belle Parc RV Resort lures travelers with plenty of amenities


    BROOKSVILLE — Imagine mid-mansion, upscale-enclave living. On wheels. The outcome is Belle Parc, an upwardly mobile, even luxury, RV retreat just north of Brooksville that opened Jan. 1 after two years undergoing expansion, uplift and amenity enrichment.

    A new welcome center is under construction, rear, at Belle Parc RV Resort, where lake sites are being completed, bringing the resort's capacity to 275 spacious park-and-stay slots.
 [Photo by Beth N. Gray]
  2. Memorial Day sales not enough to draw shoppers to Tampa Bay malls


    TAMPA — Memorial Day sales at Tampa Bay area malls were not enough to compete with the beach and backyard barbecues this holiday weekend.

    Memorial Day sales weren't enough to draw shoppers to Tampa Bay area malls over the long weekend. 
  3. Austin software company acquires second Tampa business


    Austin, Tex.-based Asure Software acquired Tampa's Compass HRM Inc. late last week for $6 million. Compass focuses on HR and payroll.

    [Company photo]
  4. Hackers hide cyberattacks in social media posts


    SAN FRANCISCO — It took only one attempt for Russian hackers to make their way into the computer of a Pentagon official. But the attack didn't come through an email or a file buried within a seemingly innocuous document.

    Jay Kaplan and Mark Kuhr, former NSA employees and co-founders of Synack, a cybersecurity company, in their office in Palo Alto, Calif., in 2013. While last year's hacking of senior Democratic Party officials raised awareness of the damage caused if just a handful of employees click on the wrong emails, few people realize that a message on Twitter or Facebook could give an attacker similar access to their system. 
[New York Times file photo]
  5. Big rents and changing tastes drive dives off St. Pete's 600 block

    Music & Concerts

    ST. PETERSBURG — Kendra Marolf was behind the lobby bar of the State Theatre, pouring vodka sodas for a weeknight crowd packed tight for Bishop Briggs, the latest alternative artist to sell out her club.

    Sam Picciano, 25, left, of Tampa and Molly Cord 24, Palm Harbor shop for record albums for a friend at Daddy Kool Records located on the 600 block of Central Avenue in St. Petersburg, Florida on Saturday, May 20, 2017. OCTAVIO JONES   |   Times