VERIZON DIRECTORIES, the proposed independent phone books company expected to be spun out of Verizon Communications, the US telecoms group, is planning to spend more than $214 million (£116 million) beefing up its online publishing arm in an effort to stave off fierce competition from Google and Yahoo!.

The internet plans were revealed in a 103-page document filed yesterday at the US Securities and Exchange Commission outlining Verizon’s plan to spin off its phone books arm in a flotation that analysts estimate could value the division at more than $13 billion.

The company revealed last December that it was considering offloading its phone books arm, which includes the superpages.com online directory.

Yesterday’s filing, however, included a detailed plan for floating the company on the New York Stock Exchange by the end of this year. The company said that no final decision had been made about the division’s future and that a sale could still be considered.

Verizon’s filing with the SEC outlined its plans for an independent directories business, the name of which has yet to be determined. The company will have its headquarters in Dallas, Texas, and Katherine Harless, the division’s president, will become chief executive. There will be about 7,100 employees.

Verizon shareholders will receive an as yet undetermined number of shares in the proposed independent company if the spin-off goes ahead.

The business will be heavily indebted from the outset, however, as the SEC documents reveal that it will carry some $9.1 billion of debt inherited from its current parent.

The new company is expected to shift away from traditional printed directories and focus largely on online services such as its superpages.com and its Superpages On The Go product, designed for wireless devices such as mobile phones.

The shift to focus on electronic publishing will mark a big turnaround for the business, which generated revenues of $3.374 billion and operating income of $1.641 billion last year.

The business made more than 90 per cent of its revenue from advertising in the traditional yellow-pages print directories and 4 per cent from the sale of advertising in white- pages directories during that period. Superpages.com generated just 6 per cent of revenues.

The SEC filing also underlines the growing threat of internet search engine operators such as Google and Yahoo! on the traditional directories and classified advertising markets.

In a section of the filing that deals with the potential risks of investing in the proposed venture, the company took the unusual step of pointing out the possibility of failure because of the strength of Google and Yahoo!. “Our internet strategy may be adversely affected if major search engines build local sales forces or otherwise begin to more effectively reach small local businesses,” the company wrote.

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