The U.S. Yellow
Pages industry has been through a difficult and eventful year in 2002.
The soft economy, coupled with intense intra-media competition, has
made this business more challenging for established players and more
risky for newcomers.
Yet despite a challenging
year, the U.S. Yellow Pages industry remains enormously profitable.
The Kelsey Group (TKG) estimates that the industry will have generated
earnings before interest, taxes, depreciation and amortization (EBITDA)
approaching US$7 billion in 2002.
The year 2002 featured
some monumental changes in the basic structure of the U.S. Yellow Pages
industry. Two of the five "incumbent" publishers, QwestDex and Sprint
Publishing & Advertising, were sold to non-telecom buyers. Private equity
firms had a big impact on the industry in 2002, having acquired QwestDex,
Cincinnati Bell Directory and, in Canada, Bell ActiMedia.
TKG expects the
industry in 2003 to be affected by many of the same factors as it was
in 2002: a soft economy (at least in the first half of the year), growing
competition and a broadening of the spectrum of competitors (can you
say Google?). We also see 2003 as a year in which the incumbents will
begin to fight back against the array of forces chipping away at their
This White Paper
will detail our end-of-year 2002 estimates for the U.S. Yellow Pages
market, as well as offer our updated forecast for 2003. A PowerPoint
presentation containing charts and graphs that illustrate these estimates
and forecasts is available to download from The
Kelsey Report Digital File Drawer�.
We will offer a
similar report on the global Yellow Pages industry in the coming weeks.