Bloomberg.com: U.S.
In this article, Bloomberg writers discuss the distressed high-yield bonds of RH Donnelley and Idearc.
I’m not a bond trader, and these guys know far more about coverage levels and projected cash flows than I ever will. So I won’t even begin to question the value of the RHD and Idearc debt.
I suppose that the problem is that revenues are decreasing when the bonds were sold based on projected earnings growth. It’s not the core business that’s in question, it’s the sales projections vs. reality.
So is the print Yellow Pages industry collapsing? I don’t think so.
In fact, the underlying directory businesses will continue to throw off outstanding cash for many years to come.
However, it’s a bit of a melting glacier. It’s hard to tell the rate of melting until it’s past.
I am not recommending, nor have I ever recommended that advertisers abandon advertising in print Yellow Pages. As a multi-media marketing executive, I am privy to inside call measurement studies that show that traditional media still deliver strong ROI.
However, most advertisers in the Yellow Pages are not sophisticated buyers, and they make decisions based on limited information, unbelievably complicated pricing schemes and fear of making a major mistake.
So don’t let the reaction of Wall Street toward debt levels drive advertising decisions.
Use call measurement services and challenge your local Yellow Pages publisher to do a better job of providing fair pricing and clear information.
And, as an Internet marketing professional, there is no business that can afford to ignore online marketing as a foundational element to their marketing plan.
