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Summary:

It has a clear digital vision under former MSN chief Scott Moore, but Yellowbook publisher Hibu warns the cost of servicing its diminishing printed directory business may render its shares worthless.

Yellow Pages in a bin
photo: Yell Group

This is an instructive moment in the increasingly troubled journey of local business listings directories.

Yellowbook (US) and Yellow Pages (UK) publisher Hibu has warned investors that restructuring under consideration “may attribute little or no value to the group’s ordinary shares“.

After drawing up a strategy to expand from listings to online marketing services, the former Yell Group, which also operates Yell.com, changed its name this spring, in an effort to draw a line under its paper-directories past.

But Hibu issued a profit warning on Wednesday:

“Although the group is delivering cost savings through its new global operating model and remains cash generative, these trends continue to impact current and expected financial performance and it is now expected that EBITDA will under perform market expectations for the current financial year.”

Shares were down by a third by mid-morning in London, as investors jumped off the boat.

CEO Mike Pocock said Hibu is exploring restructuring its balance sheet with its lenders,  “the aim of which is to provide the group with an appropriate capital structure to support the legacy business while enabling growth and development of the digital strategy“.

Effectively, Hibu is struggling under the weight of its once-mighty directories heritage, whilst trying to invest in diversifying from an online listings equivalent that has been threatened by ad operators like Google.

That’s a conundrum, but a necessary and, therefore, worthy one. Hibu does have a very clear vision for what it wants to do in digital, and has taken positive steps this year toward that. Pocock hired MSN’s Scott Moore as chief digital officer, opened new digital offices in Seattle and refocused on providing customers marketing services like website creation and SEO. Hibu built 337,000 of those sites in 2011.

This month, it said it would offer online payment processing in the US and UK.

Hibu has not been the only local business listings owner to reform. AT&T Advertising Solutions, which published the printed U.S. Yellow Pages, and AT&T Interactive, which operated YP.com and YPmobile, this year span the efforts out in to a single separate company, YP Holdings, which Cerberus Capital invested in to gain a controlling stake.

Challenged though each may be, both companies figured in this year’s paidContent 50 list of the world’s most successful digital media companies.

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  1. A once core product to marketing many a business, is increasingly irrelevant as search generally gets better and more local. Continuing to radically rethink the value of the component parts of the business while limiting investment in the old print business which seemingly cannot continue much longer is the only solution to save some business value – Stratageeb Limited

  2. The Yellow Pages have been useless for 10 years.

    1. Maybe to you Ron but what about the business owners & the home owners who still use them. Why be so quick to dismiss the lively hood of so many people. It’s so cool to be technology savy and boast know it all claims from behind a computer screen. The truth is & the real truth is you don’t know anything at all.

  3. When did you last thumb through yellow pages to find a plumber? Me neither. #acmewringer

  4. There are lots of businesses who still rely on the yellow pages to get most of their business. It is generally the senior services market but there is still a market for it. Our, younger, generation is more apt to use smartphones for searches but I still use the YP myself; it is a great lead generation tool!

  5. I agree with Macbodd, it’s a great lead generation tool.

    The seniors are starting more and more to use smart phones. My father is 80 and last month when I was visiting them someone came to drop off the yellow pages, he stopped them and said “no thanks, I don’t use them anymore”. :-)

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