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We’ve been listening to earnings webcasts for the major global directory publishers over the past days, trying to pick up any clues for how publishers see 2010 developing. Most publishers have shortened their guidance horizon or have stopped giving it altogether. In many cases, the banks and hedge fund analysts on the calls are pressing CEOs and CFOs pretty hard for any indication absent of formal guidance of how the year is shaping up.

What we are hearing on these calls is a hint of cautious optimism that the rate of decline in print revenues has bottomed out and in some cases the rate of decline may be slowing.

For example, here is what SuperMedia CFO Dee Jones said on last week’s earnings call:

“From an ad sales perspective we feel that we are in the valley. Our ad sales for the fourth quarter, on top of what we did in the third quarter, indicate to us that we are in the valley. It is too early to tell when we get out of the valley.”

Jones later clarified that he was referring to the rate of decline in ad sales. For the full year 2009, SuperMedia’s ad sales were down by 18.7 percent. SuperMedia, which emerged from bankruptcy on December 31, has stopped breaking out its revenue performance by segment (print, online and other), which it had done through the third quarter of last year.

Here is what Yell Group CEO John Condron said on his company’s Feb. 4 call announcing its third quarter and year to date earnings (the company’s financial year ends March 31):

“We are still experiencing revenue pressure. However, the rate of decline is stabilizing, and there is a significant increase in confidence.”

Through three quarters, Yell Group posted a group revenue decline of 13.3 percent at a constant exchange rate.

Pressed on this point during the questions and answers session, Yell CFO John Davis conceded that “We have a Long way to go. The rates of decline are still in double digits.”

Still, both Condron and Davis continue to argue that the negative performance of directories, print in particular, is largely the result of the brutal 2008-2009 economic environment, and not a long-term secular shift. A recent (unscientific) BIA/Kelsey online survey of industry insiders suggests that many if not most in the industry believe the declines are the result of a combination of secular and cyclical forces.

At this stage of the year at most directory companies, the (calendar) first quarter and much of the second quarter revenue has already been sold.

These comments suggest essentially that the business is stabilizing and no further deterioration from the abyss that was 2009 is expected. Perhaps there may even be a modest improvement in the rate of decline as the year progresses.

BIA/Kelsey expects 2010 to be a year where the directories business stabilizes. The degree to which things improve in 2011 and beyond will be driven in part by the performance of the economy, but perhaps even more so by the directory companies themselves.

This Post Has One Comment

  1. Charles,

    Do you trust the information provided by Dee Jones and Scott Klein related to the results, direction, and excuses for performance at SuperMedia? Considering that they are currently asking consultants and managers in the Florida sales divisions to do “closed reporting” on revenue (decreases and cancels) to make up for losses, wouldn’t you think that investors are sick and tired of revenue reporting tricks from executives?

    Also, if receives 40% of the sites traffic from the tab on, and is declining vs CitySearch/Yelp/ and other sites, are his comments on the direction of a bit too forward thinking? In order for his vertical to succeed, one would think that they need a new distribution model for the site?

    Not trying to be critical or SuperMedia, but as a “10 year” former employee who has contacts with many sales insiders, I believe they are making terrible choices that will negatively impact future of the company and its profit sustainability.

    The global economic decline was the original excuse from Dee Jones when Idearc first published results during the quarterly conference call. While other sites are increasing in traffic (CitySearch &, is declining. How long til the “economic” excuse is no longer viable?

    I have a strong feeling that with a fragmented print product due to saturation distribution, the incremental decline in ranking for SuperPages, and the continued attack on print usage from Mobile Search browsers, the “valley” that Dee Jones states SuperMedia is in will never end.

    Mike Stewart

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