At least one more major phone company will offer its directory division for sale. Already, Telstra in Australia has hinted it will spin off its highly regarded Sensis division. The Kelsey Group also expects to see at least one U.S. telecom takes steps toward selling its directory unit. * The shakeout in the U.S. competitive directory publishing industry will accelerate, as third and fourth players in some markets will drop out as advertisers consolidate their spending with the top one or two publishers. * A clear distinction between customer-driven and product-driven companies will emerge, as the more progressive organizations recognize that longevity in directories requires a new attitude toward the customer. * More cross-media deals among newspaper and classifieds and Yellow Pages will occur, as the two media seek to broaden their base of content as well as customers. * Competition between search engines and directory publishers will increase, as search engines accelerate efforts to define themselves as a medium for SMEs to reach local customers. While directories strive to emulate search engines, they will leverage their own strengths in local content and sales coverage.