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The U.K.-based publisher Yell Group announced today that its U.S. operation, Yellow Book, is seeing a sharp decline in its organic growth rate, the accumulated result of too much competition in the U.S. market. The company is projecting a 3 percent organic growth rate for the 2007/08 financial year.

The news sent Yell Group’s shares tumbling. At this writing, the company’s stock was trading at 490 p, down about 20 percent.

Several articles have appeared on this today, including this one from Reuters and this one from Market Watch.

This development appears to mark an acceleration in the impact of having more books on the street than there are willing advertisers to fill them. We’ve been watching Yellow Book’s organic growth rate decline gradually over the past several quarters.

In a statement, Yell Group CEO John Condron said the current environment will drive a shakeout in the U.S. market. We agree this is inevitable. The questions are when, how dramatic the shake up will be, and which players will ultimately benefit most.

We will have a bit more to say on this in this week’s Local Media Journal.

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