BT pays pounds 430m for US Yellow Book

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The Independent Online
BRITISH TELECOM yesterday agreed to pay pounds 430m in cash to acquire Yellow Book, the largest independent yellow pages publisher in the US, in a further move to diversify overseas and carve out a strategic niche for online content provision.

Based in New York, Yellow Book publishes almost 300 directories with a circulation of 19 million and a client base of 150,000 advertisers. It employs 1,400 staff in 32 offices located in 13 states and Washington DC.

Yellow Book will become part of BT's Yellow Pages business, which will have total annual sales of over pounds 600m. BT's UK directory publishing operation has sales of pounds 420m annually.

Yellow Book's existing management is to remain after the buyout. "When we combine Yellow Book's reputation as an aggressive marketeer with BT Yellow Pages' advanced systems and sophisticated marketing techniques, the result is a potent combination," said Joseph Walsh, chairman and chief executive of Yellowbook.

"Yellowbook.com will be incorporated into BT Yellow Pages' Yell Internet site, propelling Yell's e-commerce capabilities to a global platform."

The US directories market is worth more than pounds 8bn in annual sales, although 90 per cent of that is controlled by Bell's regional operating companies such as SBC Communications and Bell Atlantic.

Yellow Book's annual revenue or profit figures have not been revealed. Analysts estimated that BT paid two to three times annual sales for the business. The acquisition is expected to be earnings-neutral in the current year to March, but earnings are expected to be enhanced the following year.

A BT spokesman said integrating Yellow Book and Yellow Pages would yield benefits in marketing, planning, sales and automation. "The future is to move into new technologies," he said.

BT is working to enable its Yellow Pages Internet site to let customers check bills online and update adverts as well as reach particular suppliers.

The acquisition provides further evidence of BT's strategy to try to offset declining UK market share with investments abroad, while also attempting to break into market niches not traditionally associated with the telecoms market.

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