Left at the door: AT&T dumps majority share in Yellow Pages

Telecom giant AT&T said it was selling its Yellow Pages unit to equity firm Cerberus in a deal worth $950 million.
Telecom giant AT&T said it was selling its Yellow Pages unit to equity firm Cerberus in a deal worth $950 million.
(Etienne Franchi / AFP / Getty Images)
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Have the Yellow Pages outlived their usefulness as a door-stopper, a child seat and, on increasingly rare occasions, a phone book? AT&T Inc. seems to think so, selling off much of its stake in the company to a private equity firm.

In a $950-million deal – $750 million in cash with a $200-million note – an affiliate of Cerebus Capital Management will take 53% ownership in the newly created YP Holdings. That leaves AT&T with 47% ownership of the new entity, which includes the website, the YP advertising network, a related mobile app as well as the hard-copy books.

The deal is expected to close mid-year, pending approval by the Justice Department. The Yellow Pages have struggled against online directories and search giants such as Google, where many former customers now go to look up the phone number of the flower shop down the street.


Yellow Pages’ revenue has slipped 30% in two years, falling to $3.3 billion last year.

“The transaction … enables AT&T to focus on its core strategy of leadership in wireless, IP, cloud- and application-based services,” said Jose Gutierrez, chief executive of AT&T Advertising Solutions, in a statement.

But before we prophesize the inevitable demise of the tomes, consider this comparison by the Wall Street Journal: The AT&T-Cerberus deal values Yellow Pages at about $1.42 billion. Yelp, the much ballyhooed online review site that recently made its public debut, is currently valued at about $1.39 billion. Angie’s List, another Internet listing service, comes in at around $870 million.

AT&T isn’t the only producer of yellow- and white-page phone books. But according to a report last year, only 30% of Americans use such directories to look up telephone numbers and addresses and just 22% recycle them.


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