Verizon mulls sale of phone book business

NEW YORK -- Verizon Communications Inc. may sell or spin off its phone book and online directories business to raise cash as it nears completion of its purchase of MCI Inc. and invests billions in rewiring its telephone network to deliver cable TV and speedier Internet access.

Verizon, laden with long-term debts of $34.4 billion, disclosed late Sunday it was reviewing alternatives for Verizon Information Services. The unit provides sales, publishing and other services for 1,750 directory books, including 1,200 Verizon-branded publications with a circulation of 121 million.

While Verizon did not say how much the unit might be worth, published reports said it could be valued at more than $17 billion. The company said the unit had operating revenue of $3.6 billion in 2004, operates from Texas and employs 7,300 people. Analysts estimated the business will show an operating profit of $1.8 billion for 2005.

Some analysts questioned the wisdom of giving up the profitable cash flows from directories despite Verizon's need to bolster its finances as it replaces its copper phone lines with speedy fiber-optic cables. The company also faces a substantial investment upgrading and integrating with MCI's national network to compete in the lucrative corporate services market.