SUMMARY: On September 8, BellSouth Advertising & Publishing Group (BellSouth A&P) President Ike Harris held a webcast with analysts offering the state of the business for the Yellow Pages division of Atlanta-based BellSouth Corp. In 2004, BellSouth A&P generated total revenues of roughly US$2 billion, making it the third-largest U.S. directory publisher. The publishers 2004 net income of US$583 million accounted for 17 percent of BellSouth Corp.s total. BellSouth A&P is made up of BellSouth Advertising & Publishing Co. (BAPCO), Berry and Stevens Graphics.
Introducing a webcast for analysts would suggest the business unit is either being elevated in its strategic importance to the organization, or that BellSouth A&Ps profile is being raised in preparation for a possible asset sale. BellSouth made a strategic investment, albeit a relatively modest one, when it helped its directory unit buy 34 percent of YellowPages.com, which was acquired last year for roughly US$100 million. This offers some evidence suggesting the company will hang on to BellSouth A&P as a key to a strategy for getting small and medium-sized enterprises (SMEs) online.
At the time of his hiring, The Kelsey Group noted that bringing in a seasoned finance executive like Harris supports the view that an asset sale is on the horizon. It has long been our belief, however, that both SBC and BellSouth will retain their directory assets at least for the near term to enjoy the steady cash flow the subsidiaries provide. And with talks of Internet Protocol Television (IPTV) in the offing, the evolving local sales channel might just be among the most valuable assets BellSouth Corp. possesses.