inbound - 12:24 am on Jun 26, 2009 (gmt 0)

The cause of Idearc (and many other similar companies) getting into difficulties is the scale of their debt (and the covenent arrangements on said debt) in comparison to their profitability prior to interest payments.

Idearc, and others such as RH Donnelly, will probably emerge stronger from Chapter 11 as they will end up with less debt (in exchange for equity bein common). The spending spree that many companies went on (at inflated prices) hurt them; in other cases is was private equity companies loading under-geared, cash rich companies with debt and then refloating them onto an all to willing stock market.

We are likely to see consolidations and fewer, stronger players emerge from the recession.

Regardless of the woes of individual comapnies, the increase in Local Search revenues continues, and there are lots of successful companies that you don't read about.