Simba Information reports U.S. yellow pages revenues are expected to grow 3.3% to $15.99 billion in 2005, fueled chiefly by directory launches by independent directory publishers as they expand into new markets, according to Simba's latest strategic market report, "Yellow Pages Market Forecast 2005."
"Yellow Pages Market Forecast 2005" details how the yellow pages operations of the telco directory publishers, including the four regional Bell operating companies (RBOCs), which account for the lion's share of industry sales, are expected to grow revenues by 1.1% to $12.99 billion in 2005, while non-telco independent publishers will boost revenues 13.9% to $2.99 billion.
The overall 2005 industry growth is in line with that of 2004, when yellow pages revenues in the U.S. rose 3.9% to an estimated $15.49 billion, fueled primarily by double-digit revenue growth at independent publishers.
As a share of the overall U.S. advertising market, yellow pages revenues slipped from an estimated 6% in 2003 to 5.8% in 2004, demonstrating the fact that yellow pages is a lag industry, tied to the U.S. economy, but reflecting market conditions one to two years behind the current environment due to ad sales cycles that take place far in advance of directory releases.
According to David Goddard, Lead Author of the "Yellow Pages Market Forecast 2005," one of the hottest trends that will shape the industry in 2005 is a continued strong market for mergers and acquisitions, marked by the planned sale of TransWestern, the second-largest U.S. independent publisher. Additionally, the report points to a growing competitive hotbed in large metro markets, as strengthening independent publishers go head-to-head against incumbent RBOC publishers with the launches of new books; and the further penetration of Spanish-language directories into Hispanic strongholds. "Yellow Pages Market Forecast 2005" also includes a detailed analysis of how yellow pages publishers are integrating online components into their -- to date -- far more lucrative print products.
Elsewhere in the industry, Simba's research showed the market for printers and suppliers to the yellow pages industry rebounded in 2004, following flat performances in 2002 and 2003. Despite a slight drop in its directory print run to 290 million in 2004, R.R. Donnelley remains the market leader, according to "Yellow Pages Market Forecast 2005."
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