Yell, the directories business today announced that its revenues fell by 12% to £1.35bn for the nine months to the end of December and said it expects earnings will be slightly lower than analyst expectations for the full year.
The heavily indebted company, which operated in the UK, US and Europe, blamed the issue on a decline in it core print revenue, which is being driven by a market drift to digital as well as economic pressures.
The company is the latest in a line of media businesses to report a decline in classified advertising confirming a trend that is exercising newspaper publishers and directory publishers alike.
In the nine-month period Yell's pre-tax profits dropped 50% from £75m to 38.6m. Around 75% of Yell's total profits derive from print advertising which was down 18.4%.
Chief executive Michael Pocock was quoted in The Guardian as saying: "Yell's challenges stem from both economic pressures and, more fundamentally, from the shift to digital media.
"We expect print to continue to decline steadily. That said, print remains highly cost effective for our advertisers and it will continue to be so, complementing digital for many years to come. In this reducing print market, we believe that Yell continues to gain market share."
More seriously the shortfall in print revenues is not yet being made up by online sales. Growth in digital media was up 10.4% to £342.2m, but this rate of growth is levelling out when compared to historic data.
Pocock says the reason is simply that Yell has more competition online. At the end of the day the cost of entry into online directories is significantly less than launching into the offline market.
“The digital marketplace is rapidly growing and highly fragmented,” he said, “It is one where the consumer is a leader and a small market share can mean big business and strong growth."
In the UK specifically, Yell reported a print revenue decline of 22% to £231m, with online revenues growing by 1.8% to £135m.