David Prosser: Yell still has some time to put things right

Outlook Good news and bad from Yell. The Yellow Pages publisher's profits warning yesterday suggests that, even allowing for the difficulteconomic environment, its print business – previously so profitable – is dwindling away faster than anyone expected. The glass-half-full perspective, however, is that a narrow window of opportunity remains to replace that business with digital revenues.

Mike Pocock, the company's new chief executive, is promising to unveil the results of his strategic review of Yell's options in June. But his conclusions are not difficult to foresee: in an online world, fewer and fewer people will turn to a heavy yellow book with 500 pages to flick through should they require the services of, say, a local plumbing firm.

Happily for Yell, the print business is still throwing off enough cash to service its debt mountain, giving Mr Pocock some time to breathe. Even better, while Google may have internet search all wrapped up at a general level, the local market is much more fragmented. No single player currently has more than an 8 per cent share of local search.

Moreover, Yell is performingbetter than you might realise in this sector. It may not be your search engine of choice just yet for local inquiries, but it's likely to appear pretty high up in the results generated by Google – and then to provide more fulsome answers. It has advantages too: an established brand, a salesforce already doing the rounds flogging print advertising and a broad product offering.

For all that, Yell has been talking about embracing digital, without actually doing so, for far too long. Mr Pocock may talk the right language, but will his strategic review deliver something his salesforce can shift in sufficient quantities to replace that disappearing print revenue? And will the brand prove a double-edged sword, with younger consumers writing it off as belonging to a bygone era?

Not necessarily. One could imagine how a Yell app, tailored to your local area, might be hugely attractive, for example. The company is also investigating social networking. But it had better move quickly: there are plenty of competitors ready to jump ahead of it unless Yell gets it right. And none of them are saddled with a debt pile getting on for £3bn.