Sunday, August 31, 2008
Let Your Fingers Do The Walking
And have them walk as far away from Yellow Pages investing as possible. The two main companies that can use that name are R.H. Donnelley Corp and Idearc Inc. They claim that their higher costs prevent them from competing with independents such as YellowBook. In Manhattan, a quarter-page ad runs $24500 in the Yellow Pages yet only $10400 in YellowBook. Why the higher costs for the big two? For one thing it is debt service from the massive borrowing they did to acquire competitors in a dying industry. Both companies' stock prices have dropped 95% in the past year. One major analyst says the companies are actually worth less than the book value of their debt.