Phone
“I havent opened a phonebook in years,” said Belardini, a 39-year-old Rome-based lawyer. “The best use I put them to is as door stoppers or footrests.”
Phonebook publishers Seat Pagine Gialle in Italy, the U.K.s Yell Group Plc and Frances PagesJaunes Groupe are struggling to boost sales as users and advertisers ditch their printed directories for online searches. While the companies have beefed up their own Internet-based offerings, they still depend on phonebooks for most of their revenue, and their online growth has yet to compensate for the drop in print-based sales.
“Online is growing fast but not enough to offset the print decline,” said Lorna Tilbian, an analyst at Numis Securities Ltd. in London. “Some day there will be a tipping point.”
In 2007, Microsoft Corp. co-founder Bill Gates said yellow- pages use among people under 50 would drop to zero in five years. Yet printed directories account for more than two-thirds of revenue for Seat and Yell and half for PagesJaunes.
Seat and Yell posted their first losses in five years in the last full-year periods. Yells U.K. print business fell 20 percent in the six months through Sept. 30 while online sales rose 8.7 percent. Print revenue at Seats Italian unit dropped 14 percent in the first nine months, while Internet sales jumped 30 percent. In the first nine months, print sales at PagesJaunes slid 5.4 percent, while online revenue rose 9.5 percent.
Internet Penetration
Yell shares have tumbled 18 percent in London in the past year, while Seat has plunged 65 percent in Milan. Of the 15 analysts who cover Seat, only two rate it a “buy.”
The companies say they need to develop both their print and online directories to grow.
“Our Yellow Pages directories continue to receive significant usage by U.K. consumers, 22 times a second,” said Jon Salmon, a spokesman for Yell. Every pound spent on print ads helps to generate on average more than 25 pounds ($41.50) worth of new business, he said.
Print-book usage is stronger in countries where Internet penetration is lower. Only 9.7 million Italian families, or 39 percent of households, have a broadband connection, according to a September report by lobby group Confindustria. That compares with 23.9 million Italians still using print directories, Seat said, citing researcher GfK Eurisko.
Mature Media
While the recession can be blamed for a drop in print advertising, the declining sales reflect a broader trend, said Kepler Capital Markets analyst Fabio Iannelli.
“It is not simply a matter of a weak economic outlook,” said Iannelli, whose price estimate for Seats stock is zero. “We guess the print business would continue to be lacklustre even with positive GDP growth. Print business is a mature media and has been, and will continue to be, crowded out by the Internet to a higher extent than any other media.”
The falling demand is being compounded by protests from environmental groups.
Belardini created a Facebook Inc. group called “Lets Eliminate Printed Phone Books,” which counts 2,123 members. His appeal is among many such petitions on the Web.
Online Drive
Online directory 192.com started the “Say No to the Phonebooks” campaign. It estimates 75 million directories are distributed yearly in the U.K., enough to cover Londons Hyde Park twice. Beside Yell, BT Group Plc and Seats unit Thomson distribute phone books in the U.K.
“I spend eight, nine hours a day in front of a computer,” said Bern-based Rolph Mueller, 34, who created the “Print Directories Equal Unnecessary Pollution” group on Facebook. “When I get phonebooks they go directly to the recycling box.”