Verizon to shed directory business

Verizon announced today that it plans to spin off or sell its domestic directory business, including both print and Internet Yellow Pagesm, by the end of 2006. The company filed a form 10 registration statement with the Securities and Exchange Commission indicating its plans for the spin-off.

The company, which said last December that such a spinoff was possible, did not fully commit to the spinoff or its timing, and said a sale of the directory unit is still possible. Verizon made $3.37 billion in revenue from its directories in 2005, but the company is gearing up to focus on its broadband business and major investments in building out fiber to the premises within its local service region.

In a press release, Verizon indicated the SEC filing was made by a wholly owned subsidiary it had recently formed called Verizon Directories Disposition Corp. which would become a new publicly traded company, with a different name, managed independently from Verizon. Headquartered in Dallas, the new company includes about 7100 employees.

Verizon stockholders would get shares in the new company, at one share per 20 Verizon shares, on a non-taxed basis, and be paid for partial shares on a taxable basis.