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November 18, 2003

The Kelsey Group Forecasts Global Yellow Pages Revenue to Grow to US$36 Billion by 2008

The firm expects 'digital directional media' to account for US$8 billion of total revenue during the forecast period.

Princeton, NJ (November 18, 2003) – Strong growth in "digital directional media" will help propel the global Yellow Pages industry to nearly US$36 billion in total revenue by 2008, up from US$25.4 billion in 2002, according to a forecast to be released later this week by The Kelsey Group.

By 2008, more than US$8.2 billion, or roughly 23 percent of total revenue, will be generated by digital directional media. This new revenue category encompasses online and wireless Yellow Pages directories, as well as local commercial search – search engine advertising by small businesses looking for customers in their local markets.

"Directional media has been linking local buyers and sellers for nearly a century," said Neal Polachek, senior vice president of The Kelsey Group. "We expect this to continue. However, buyers and sellers will have an increasingly rich set of media options when looking to find one another – from printed directories to localized Internet search to wireless directories."

The Kelsey Group's Global Yellow Pages Forecast provides analyses of five regions – North America, South America, Asia/Pacific Rim and Rest of World, which includes the Middle East and Africa. North America accounts for more than half of global revenues, followed by Europe, Asia and South America.

The firm has divided its latest forecast into several new classifications, representing phone company-affiliated publishers, those publishers that have been sold by telephone companies but remain market "incumbents," and independent publishers that are positioned as market "challengers." This latter group remains the fastest growing category of print publisher, with a projected compound growth rate of 10.2 percent over the forecast period.

"Our new classification system was driven in large part by all of the deal making that has gone on in this industry over the past few years, with many phone companies selling off their directory units, both in the U.S. and abroad," said Charles Laughlin, program director of The Kelsey Report®. "The binary classification of phone company publishers and independent publishers does not do full justice to the complexity of this business today."

Close-Up on U.S. and Local Search
The Global Yellow Pages Forecast features a detailed view of the future direction of the U.S. Yellow Pages market, forecasting revenue growth from US$14.2 billion in 2002, to US$21.3 billion in 2008, with modest growth of the core printed Yellow Pages product.

In 2008, The Kelsey Group estimates digital directional media will account for 23 percent of U.S. Yellow Pages revenue, while the balance will come from the traditional printed directories that land on consumers' doorsteps every year. According to the firm, local search will be a primary contributor to the growth of digital directional media. The opportunity in local search, and to a lesser degree online and mobile Yellow Pages, will drive the U.S. industry to a 7.0 percent compound annual growth rate over the forecast period.

For more information regarding the Global Yellow Pages Forecast, contact Steve Vasil at (905) 765-5910, or by e-mail at svasil@kelseygroup.net.

About The Kelsey Group
The Kelsey Group is the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search. Beginning in 1986, the company has built a reputation as the leading analyst firm covering the directory publishing community, providing advisory (The Kelsey Report® and Interactive Local Media), publishing (Global Yellow Pages™ and Local Media Journal™), consulting (more than 300 individual assignments) and conference services (60 events).

For more information contact:

Eileen Pacheco
(781) 556-1026
eileen@tango-group.com

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