Internet can work with Dex, exec says

By Jon Sarche, Associated Press
September 28, 2005

The proliferation of Internet search engines is likely only to help the growth of Yellow Pages companies rather than compete by providing much of the same information, the chief executive of the nation's fourth-largest directory company said Tuesday.

George Burnett, president and chief executive officer of Dex Media Inc., said during an industry conference that Internet portals such as Yahoo! and Google can serve as supplements or even partners to the information available in the Yellow Pages books sitting on shelves in millions of consumers' homes.

The way companies such as Arapahoe County-based Dex Media work with Internet search engines will determine their success, he said in an interview after a speech at the Directory Driven Commerce conference sponsored by The Kelsey Group Inc., an independent analysis company.

"There are a lot of major trends that could create a rising tide," Burnett said. "It's how well we leverage that and take actions on those things that will determine our success."

Burnett refused to comment on a recent Wall Street Journal report that Dex was in negotiations to be acquired by Cary, N.C.-based RH Donnelley, the nation's fifth-largest Yellow Pages company. Donnelley officials also have declined to comment.

Dex, which Denver-based Qwest sold to two investment firms two years ago, publishes directories in 14 mostly Western states, including Colorado. It reported $34 million in income in the first six months of 2005 on revenues of $825.2 million. The company also said it has $5.5 billion in debt.

Donnelley publishes directories in 19 states across the country, including six in which Dex also publishes. In the first six months of the year, Donnelley reported $27.8 million in income on revenues of $440.3 million.

Consolidation and financial restructuring have been prominent themes in the Yellow Pages industry for several years, analyst John Kelsey said.

He said the ubiquitous yellow directories will remain an important reference even as consumers increase their use of Internet search engines and online directories. The information is what is important, not the medium, and people will use whatever medium is most convenient, he said.

"Print (directories) will continue to be viable and the Internet will be increasingly viable," Burnett said. "We are not troubled at Dex with the idea that content is what's important. All demographic groups will use multiple platforms to access that content."