Over the past few years, a big trend in the telecom business has been the spinning out or sale of telephone directory businesses by carriers looking to generate cash for other strategic initiatives such as the expansion/upgrading of high-speed networks. The list includes Telus and Bell Canada, while Verizon is apparently looking to sell its directory businesses for $13-billion to $17-billion. While definitely Old Telecom, telephone directory businesses are attractive because they generate lots of cash flow and, so far, they have managed to fend off the advances of online services such as Google Local. For investors who purchase telephone directories, a key issue is what to do with them. Do they, for example, try to maximize cash flow by aggressively pushing sales and streamlining operations? Do they try to acquire other telephone directories to drive synergies and operational efficiencies? Or do they try other strategic avenues? Perhaps the telecom industry and investors should look at Yellow Pages Group, which was spun out of BCE Inc. in 2002 (BCE, which owns Bell Canada, sold a 90% stake for C$1.9-billion to a group that included KKR in 2002. Today, that stake is worth C$6.7-billion). Yellow Pages made an intriguing move earlier this week when it agreed to acquire Trader Media Corp. for C$436-million. Trader Media publishes the Auto Trader in Ontario as well as 64 other classified publications such as Boat for Sale and Employment News. The purchase is intriguing strategically because it shows how telephone directory owners are willing to diversify into other print/classified-related businesses to maintain and/or boost cash flow growth at a time when there is more competition from online rivals.  This is particularly important to Yellow Pages, an income-trust that distributes most of its profits to unit holders.