Verizon Info Services on Block
As noted in Greg’s post, last night, Verizon Corp. posted an announcement on its Web site that it is "reviewing strategic alternatives for the domestic operations of the company’s wholly owned directories publishing business, Verizon Information Services." You can review the original announcement here.
VIS had 2004 revenues of US$3.6 billion and EBITDA of US$1.7 billion. It also had a negative growth rate of 5.6 percent. VIS is reported to be commanding a price in the range of US$17 billion. This would be a blockbuster deal, and a challenging one for any single buyer to handle. All of which suggests a spin-off, which is one of the options Verizon presented in its announcement yesterday. TKG will provide more detailed coverage and analysis in the coming days, as more facts emerge.
This Post Has One Comment
I did an interview today on CNBC's Closing Bell on this story. The key question seemed to be, if this business (Yellow Pages in general) is dying a slow death, why would anyone want to buy it? The answer is pretty simple. The directory business is still hugely profitable, still widely used and still central to business acquisition for many small businesses. There needs to be a better appreciation for the fact that while Yellow Pages is clearly a business under strain (from internal competition, the Internet, etc.), it is still a huge source of value that isn't going to disappear within any current investor's time horizon. There is some very profitable middle ground between being the hottest thing on the planet and the walking dead.