On yesterday’s AT&T earnings call, CEO Randall Stephenson opened the door to the possibility that the telecom giant would sell off its directories business.

Here is what Stephenson said on yesterday’s earnings call: “That’s one area that we’re going to obviously take a very hard look at, and while I don’t want to give any indication on M&A activity, it’s one of these areas that we’re going to have to decide, do we keep it, do we restructure it, as we move forward.” The quote is from an article in the St. Louis Post-Dispatch.

In our annual Picks and Predictions Advisory released earlier this month, The Kelsey Report predicted that at least one of the few remaining telecoms owning a directories business would divest it this year.

Here is what we said: “2012 could end with zero publishers of any significant size under telecom ownership. The most likely scenario is that one of the two biggest operators still under telecom control, AT&T or Sensis, will be sold. AT&T seems to be the most likely candidate.”

AT&T Advertising Solutions, the Yellow Pages operation, ended the year down 16.3 percent, to $3.6 billion. BIA/Kelsey estimates the company had print revenues totaling $2.3 billion, down almost 23 percent over 2010. Online revenue growth was just 3.3 percent, to 997 million. Online growth declined throughout 2011, from 6.8 percent growth in Q1 to a 1.2 percent decline in Q4. Since 2006, BIA/Kelsey estimates the Advertising Solutions business has lost about US$2.6 billion in top-line revenues.

AT&T’s directories operation is a two-headed monster that comprises the St. Louis-based Advertising Solutions business, which includes print directories and the sales force, and California-based AT&T Interactive, which operates the YP.com platform and develops digital products. Advertising Solutions is led by Jose Gutierrez, and the interactive business is led by David Krantz. Both units report to Ray Wilkins, who is CEO of AT&T Diversified Businesses.

Wilkins and Forrest Miller, who runs strategy and M&A activity for AT&T Diversified Businesses, have recently announced their retirements from AT&T. These departures will leave the organization short two senior leaders with ties to AT&T’s directories business. Miller led the directories business when it was under the SBC corporate brand.

The European directory and local search operator Truvo has taken major steps toward consolidating around its flagship Belgian operation. On Dec. 22, Truvo “divested” its operation in Ireland, selling it to Contact Holdings, which operates Yellow Pages companies in the Baltic States. Terms of the transaction were not disclosed.

Truvo has also dramatically curtailed its senior management team, eliminating five positions, many held by longtime Truvo executives. The departed include CFO Marc Goegebuer, MD Belgium Martine Bayen, VP HR Peter Vandenheulen, VP Marketing Jose Lema and VP Operations Ramon Ferrer. CEO Donat Rétif will assume the role of MD Belgium while the other positions will be eliminated or absorbed by remaining staff, according to an announcement sent to investors on Dec. 23. The combination of selling Ireland and eliminating senior positions will save Truvo 6 million euros in costs, according to the statement.

Jon Martinsen is CEO of Contact Holding. He and Truvo CEO Donat Retif worked together at Herold Business Data in Austria when it was owned by GTE (later to become SuperMedia). Herold is now a unit of European Directories. Contact Holdings is apparently the new name for Interinfo Holdings, which operates directory companies in Estonia, Latvia and Lithuania. Interinfo is owned by the private-equity firm Balt Cap.

Truvo’s Irish operation, which uses the brand Golden Pages, was battered by a combination of a brutal Irish economy and a heavy exposure to one large metro market, Dublin. The last full-year figures for Truvo Ireland were in 2009, before a recapitalization removed Truvo’s obligation to report its results publicly. Truvo Ireland finished 2009 with revenues of 54 million euros, a 26 percent decline from the year before. Assuming similar declines over the past two years, the business would end this year in the 34 million euro range. David McGuffy was MD of Truvo Ireland. It is unclear if he will remain with the unit under its new ownership.

Truvo (then World Directories) was initially a minority owner of the Irish directory operation. It acquired the remaining 63 percent of the Irish business from Eircom back in 2002 for US$186 million (at the 2002 exchange rate), which was roughly an 11X multiple on EBITDA.

Rétif makes clear in the statement that Truvo sees its future tied largely to the fortunes of its Belgian operation. The fate of Portugal, Truvo’s remaining non-Belgian operation, is uncertain, but it’s logical to assume Truvo may be seeking a buyer. Truvo is also a minority owner of Trudon, the South African directory and local search provider.

The events listings space has taken a number of twists and turns with Zvents trying to steer people to retail events as a business model, and also become a media driver in its own right; Eventful focusing more and more on Hollywood studios and TV shows to drive viral demand for their entertainment properties; GoldStar focusing on quiet, sophisticated events; and others focusing on social media and transaction hybrids.

Not everything has worked out as planned. Today, Zvents announced that it has been sold to eBay’s StubHub. For StubHub, which is a reseller/scalper of events, it will get a chance to work Zvents’ list of events from 140,000+ local marketers and promoters. Typically, 60,000 events are listed at any one time.

It — along with other eBay properties — may also seek to do more with Zvents’ large network of newspaper partners. But that would likely be a second phase, if ever.

Yodle, a third-party SMB reseller, announced yesterday that it acquired ProfitFuel, a company that provides search engine optimization services to small businesses, for an undisclosed sum. David Rubin, previously CEO of Profitfuel, will now join Yodle as senior vice president of sales. ProfitFuel’s main service called Outrank is designed to generate inbound phone calls and emails by delivering prominent rankings for clients on top search engines.

Historically, Yodle focused its local online marketing services on small-business advertisers with larger budgets ($1,000+monthly) and national brand advertisers like franchises and manufacturer/dealer organizations. By acquiring ProfitFuel, Yodle has a combined 450-person product and sales force capable of reaching smaller businesses. These SMBs may have smaller marketing budgets, but they still want the accountability of measuring their marketing performance.

2010 was a dismal year for the New Zealand branch of Deutsche Bank after exposure to the Yellow Pages Group restructuring. The KPMG Financial Institutions Performance Survey issued last week shows that Deutsche ranked at the bottom out of 10 New Zealand branch banks on key measures, including a $53 million loss for the financial year, a 162 percent fall from the previous year’s profit and a negative 37 percent return on equity.

Local Chief Executive Brett Shepheard declined to comment on the deterioration specifically, but in a written statement to www.stuff.co.nz said that “the 2010 result was effected by a loan loss provision from a legacy leverage loan portfolio.”

Last December 40 banks holding Yellow Pages Group’s debt were expected to vote on a restructure of YPG’s reported debt mountain of 1.4 billion for the June 2010 financial year. The banks loaned nearly $1.5 billion to Unitas Capital, a Hong Kong-based private equity group, and a Canadian teachers pension fund to help fund the $2.24 billion purchase of Yellow Pages from Telecom in 2007. The debt restructure came after the banks decided against selling Yellow Pages through a sales process run by Goldman Sachs last year, which would have attracted interest from potential buyers ranging from $400 million to $600 million.

The FIPS report also stated that total equity had increased across New Zealand’s banking sector in 2010, “with the exception of Deutsche Bank.”

According to one source, Marquette, Ketchum Directory Advertising and Directory Concepts are among the rival CMRs taking over regional chunks of the TMP business.

In an April 1 letter to its clients posted on TMP’s website, agency CEO Mike Flanagan wrote that, “Unfortunately, an unforeseeable perfect storm of events has hit our company. Industrywide declines in print usage have significantly reduced our revenues. At the same time, we are contending with substantial debt obligations. Unfortunately, this combination has severely limited our ability to refinance — leaving us no responsible choice but to wind down operations.”

Flanagan’s description could apply to many global directory publishers. Of course, publishers’ ongoing ability to generate substantial amounts of cash is one clear difference. Still, this is an uncomfortable reminder that casualties are inevitable in a changing industry, and sometimes very prominent brands are among the casualties.

The fate of TMP’s digital arm, 15 Miles, remains unclear. While TMP’s traditional Yellow Pages business has suffered for some time, the 15 Miles operation has experienced strong growth. This suggests it might find a serious buyer or could even strike out as a stand alone agency.

TMP (founded as Telephone Marketing Programs) was formed in 1967 by Andy McKelvey, who also achieved wider fame as owner of Monster.com, which eventually became TMP’s parent company. TMP was the original Yellow Pages agency that was independent from the then telco-owned directory publishers. McKelvey essentially created what became the national Yellow Pages agency, or CMR, industry.

Monster sold off the TMP business in 2005 to the private equity firm Audax Group. At that time, TMP was in the midst of a long-term decline. A 2001 study from The Kelsey Report cited TMP financial data showing a steady year-over-year decline in publisher commission revenues. In 2008 TMP resigned its membership in the Association of Directory Marketing, a move that was soon followed by the ADM’s merger into the Yellow Pages Association.

So while the demise of TMP is stunning given the company’s iconic stature within the Yellow Pages industry, it is really the end product of a very long process of decline.

Canada’s Yellow Media announced today that it has sold its Trader Corp. vertical media business to the private equity firm Apax Partners for C$745 million. The deal lets YPG focus on transforming its core directories business and the cash helps improve the company’s balance sheet. YPG is not completely getting out of the vertical media business, at least for now. It will retain its real estate and employment operations and the online classified site LesPac.com.

Trader Corp. is particularly strong in the automotive category.

In 2010, YPG generated C$315 million from its vertical media business, compared with C$1,365 million from its directories business. The EBITDA margin for vertical media last year was C$91 million, suggesting sale multiple of more than 8 times trailing EBITDA.

Here is how BIA/Kelsey described the deal when it was announced in December 2005:

With its announcement this week that it will acquire Trader Media Corp., Canada’s Yellow Pages Group (YPG) has joined a small but growing community of Yellow Pages publishers that see classifieds not only as a new revenue source but also as a key element of their long-term content strategies.

Apparently long term amounted to roughly five years. BIA/Kelsey reported at the time that the sale price was C$435 million, which represented a multiple of 10.1 times EBITDA.

Reply.com has carved out a niche among online marketing companies by offering an auction marketplace for locally targeted consumer traffic for various verticals (home improvement, autos, real estate, insurance, etc.). Now, it is set on building a mobile strategy. The company recently announced that it has acquired AdHubs, a mobile app developer that sees vertical apps as a major new source of lead generation and advertising.

The small start-up, cofounded by former Yahoo Infrastructure Technologies head Reza Hajebi, focuses on “commuter apps,” such as games, as well as apps such as recipes and sports. It has already built 1,200 apps and is seeing 30 percent growth every month.

AdHubs is now set to ramp up quickly. It expects to have 95 developers on board by the end of the year, and create an assembly line for apps. It expects to add 25,000 apps in 2011 alone.

“A closed network gives better results,” says Hajebi, who has been made Reply.com’s CTO. “Mobile is the best way to measure user behavior.” Hajebi says AdHub quantifies up to 28 touch points for mobile users.

Reply.com COO Sean Fox is set to discuss leads and vertical marketplaces at ILM East March 21-23 in Boston.

AOL will buy The Huffington Post for $300 million in cash and $15 million in stock, and put Arianna Huffington in charge of the AOL Local sites (MapQuest, Patch, MovieFone) as well as its growing collection of opinionated tech and vertical news properties, such as TechCrunch, Engadget and Popeater. AOL’s vertical sites, such as TMZ.com, run by David Eun — the former “MediaGlow” properties — will continue to be run separately.

The acquisition of The Huffington Post might be seen as the crown jewel of an AOL strategy that has rounded up some of the most provocative sites that bring consumers back to check multiple times a day. The Huffington Post will add its tabloid-like, huge headlines on its front page to AOL’s already successful funneling.

The service relies on the contribution of hundreds of inexpensive-but-often famous contributors who are happy for the exposure. It also relies on aggregated content. As such, HuffPo represents a different view of the industry’s future than Yahoo’s $100 million acquisition of Associated Content, which commissions content based on demand analyzed by search algorithm — although a content farm would fit too. AOL CEO Tim Armstrong was an original investor in Associated Content.

The Huffington Post gets a lot of mileage from its links to pictures of semi-naked women, and its provocative headlines, including, it seems, anything to do with Sarah Palin. It has a tabloid-like appeal and represents a liberal alternative to Fox News on the right. It receives more than 25 million unique visitors a month.

Strategically, however, The Huffington Post is more about its successful verticalization of 25 vertical headings ranging from politics, media and entertainment (the early ones) to newer ones such as green, books, divorce, comedy and college.

The vertical strategy, indeed, was first explored as The Huffington Post began to branch out in local, with city editions developed for Chicago, New York, Los Angeles and Denver. The irony is that local, after a big splash, has been backburnered by HuffPo as it saw a bigger bang for the buck by pushing more efficiently into the other verticals.

Will local become more of a priority under Huffington? It might, in a sideways manner. Editorially, Huffington noted on her site that Patch’s broad scale now provides “an incredible infrastructure for citizen journalism in time for the 2012 election, and a focus on community and local solutions that have been an integral part of HuffPost’s DNA.”

Business-wise, one of the reasons Patch has spent so heavily to launch so many editions so quickly is to scale nationally. That would allow it to heavily market the Patch brand — and attract national advertisers for geotargeting. With a broader collection of vertical content, the branding effort might now be more efficient. But the brand may not be Patch (or MapQuest, or MovieFone) so much as The Huffington Post.

Local.com, which recently introduced an integrated coupon and sales platform as part of its relaunch, has announced that it will enter the group buying/deal-a-day space via the acquisition of iTwango, a Los Angeles-based start-up that launched in October. The company, founded by former Citysearch CTO Hal Oreif, will be rebranded under Local.com.

The company’s first group buying products for Local.com will be rolled out in mid-2011. They will be supported by Local.com, its various hosted sites, and its network of 1,000-plus local and regional media sites. These sites can add the deals site on a white-label basis, pitting Local.com directly against such companies as Tippr.com, Nimble Commerce, Deal Current and others. At the same time, the deal network will be built up with telesales and e-mail marketing.

Local.com CEO Heath Clarke says that the Local.com diligence team was impressed that iTwango was built “almost as an exchange” that can easily funnel coupons through the platform and publish to the Local.com search engine.

The whole point is to provide a broader range of services, adds Clarke, noting that group buying is a perfect fit with Local.com’s directory, its coupon and deals platform, and and its Octane 360 optimization service. “We can sell through some of those on a wholesale basis.”