We Ain't Dead!


Shares of Yellow Pages publisher R.H. Donnelley (RHD) have fallen 93% in the last year as more people turn to their cell phones or to the internet for directory assistance. And on Tuesday, Moody's reduced its rating outlook for the company.

Sounds gloomy, however this week R.H. Donnelley said it anticipated ’08 revenue to come in around $2.6 billion with earnings of $845 million. Could the company be turning around?

David Swanson, CEO of R.H. Donnelley Corp joins the panel for this conversation. Following is a summary of his main points.

You want to set us straight?

“I think there’s a lot of misperception about the use of the Yellow Pages,” replies Swanson. “This year 13.4 billion people referenced the print Yellow Pages. Last year it was the same. Now add to that the fact we’re diversified online. Internet yellow pages received up to 17.2 billion references.”

But you have had declines.

“The pace of the decline has flattened out,” Swanson says. “If you look 2006 – 2007 it’s flattened out for print.”

Don't you have a mountain of debt?

"Debt is all about cash flow," replies Swanson. "And we have strong cash flow that can easily service the debt. What’s driving us down is the fear of secular decline versus cyclical decline. We’re not going to be down forever."

But you have to concede that the number of people using print Yellow Pages over the next decade will be less?

“Absolutely,” Swanson says. “That’s why our business models are diversifying on-line. And the other thing to understand is that we’re not wed to the print products. We’ve diversified into... search engine marketing."

“The thing that we don’t get credit for,” he adds, “is that we have thousands of people that are acting as the local marketing consultants for small and medium sized businesses. (In other words, Yellow Pages remain the the primary way in which small businesses attract customers, according to Sawnson.) We help them understand where to put their money.

You’re saying as long as there is small business in America there will always be a Yellow Pages.

“Yes, we’re the ones who are doing the selling to the small and medium size businesses,” replies Swanson. “And we’re seeing growth in that area.”

Read More

> Check out the post “Are The Yellow Pages Dead” from Thursday Mar. 6th

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