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Verizon May Sell Book Unit; Directories Business May Yield Cash As Focus Hits TV, Broadband

Posted on: Wednesday, 7 December 2005, 06:00 CST

By From Wire and Staff Reports

Verizon Communications Inc. may sell or spin off its phone-book and online-directories business to raise cash. The move comes as it nears completion of its purchase of MCI Inc. and invests billions in rewiring its telephone network to deliver cable TV and speedier Internet access.

The company, laden with long-term debts of $34.4 billion, disclosed late Sunday that it was reviewing alternatives for Verizon Information Services. The unit provides sales, publishing and other services for 1,750 directory books, including 1,200 Verizon-branded publications with a circulation of 121 million copies.

As a franchised local phone company in Virginia, Verizon is obligated under State Corporation Commission rules to provide a phone directory to its customers. Verizon spokesman Harry J. Mitchell said yesterday that the company will honor any state regulations on directory listings.

Numerous errors in Verizon's Yellow Pages and white-page directories have drawn fire from Virginia consumers. In January, the State Corporation Commission ordered its staff to investigate errors in the white pages after its informal efforts to work with Verizon failed to stop the mistakes.

The SCC study is still under way. However, the staff said in a preliminary report in August that both human and computer errors and "an unnecessarily cumbersome process" appeared to be behind the problems.

While Verizon did not say how much Verizon Information Services might be worth, published reports said the business could be valued at more than $17 billion.

"With the MCI merger expected to close shortly, this is the right time for us to optimize our business mix and unlock value," Verizon Chief Executive Ivan Seidenberg said in a statement.

Some analysts questioned the wisdom of giving up the strong, profitable cash flows from directories despite Verizon's need to bolster its finances as it replaces its copper phone lines with speedy fiber-optic cables and invests in its fast-growing Verizon Wireless venture.

Shares of Verizon, down more than 20 percent in the year, fell 16 cents to close at $31.71 yesterday on the New York Stock Exchange.

Staff writer Greg Edwards contributed to this report.

Source: Richmond Times - Dispatch

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