I stumbled across a fascinating interview given by the new CEO of Dex One, who rather candidly admitted the company is searching for a strategy.

Dex One, for those of you who don't follow the endlessly shape-shifting yellow pages industry, is an entity created when yellow pages sales agent R.H. Donnelley went on a shopping spree and started buying up yellow pages directories from its phone company customers. When the market started to question the wisdom of acquiring so many print properties in an increasingly online world, R.H. Donnelley said "no problem" and snapped up website Business.com.

Not surprisingly, this ill-timed shopping spree caused R.H. Donnelley to file for bankruptcy in 2009. What emerged from the bankruptcy was Dex One, still a major player in the industry with a $500 million market cap and over 3,000 employees. So when Dex One admits its next act isn't clear, this is big news.

I have long chastised the yellow pages industry for not having a deep understanding of its own business model. Very simply, yellow pages publishers have long been little more than ad sales organizations. Every other aspect of the business was viewed as an expense and an annoyance.

So when the Internet came along, the major yellow pages publishers saw Nirvana: it was a chance for these inherently regional publishers to quickly expand nationally. The natural expectation was the formula that had worked so brilliantly on a regional level would work just as well when extended nationally. But it did not work out that way at all. Here's why.

These yellow pages publishers thought all they needed to do was license a national business database of names, addresses and phone numbers and they would be ipso facto, national yellow pages publishers. Not true. In yellow pages and buying guides, it is the advertising, not the name and address listings that is the content. Throwing up 10 million name and address listings is easy; selling the requisite number of ads to have a meaningful base of content nationwide was well beyond the resources of even these giant publishers. Users quickly discovered that online yellow pages weren't very useful for sourcing products and services because there was so little content depth, so they started to look elsewhere -- easy to do online -- creating an opening for all sorts of competitors who delivered deeper content that both detailed and differentiated vendors. These competitors  have been merrily chipping away at the formerly impregnable yellow pages franchise ever since.

Dex One is re-positioning itself as a marketing services company in the belief that its relationship with its extensive advertiser base is now its core asset. That's not an unreasonable approach, but one wonders if that will be enough at this stage in the evolution of the Internet.

The story of online yellow pages is an important cautionary tale for all buying guide publishers. It did itself in by trying to grow too much, too fast because it didn't understand its own business model. Buying guide publishers can't sell advertising on a sustained basis unless they are delivering value to their user bases as well. Forgetting one side of your business can cost you your entire business.