Dex Media announced today that former Yellowbook CEO Joe Walsh will take over as its President and CEO, replacing Peter McDonald.

It has been widely rumored for some time that Walsh was in line for a key role at Dex Media. Walsh and his former Yellowbook colleagues Gary Shaw and Gordon Henry have recently been doing consulting work at Dex Media. Their presence sparked rumors that a succession plan was in the works, likely involving Walsh, 51, replacing the 64 year old McDonald, who came out of retirement to run SuperMedia, which later merged with Dex One to become Dex Media.

Walsh was a popular leader at Yellowbook, but he left the company in 2011, not long after its parent company Yell (later renamed hibu) brought in a new management team led by Mike Pocock. Since leaving hibu, Walsh has consulted and served on boards and has remained visible at local search industry conferences.

Walsh’s leadership of Yellowbook changed the U.S. Yellow Pages landscape.  Through expansion and acquisition, he built the publishers from a small regional independent into a roughly $2 billion giant that challenged incumbent publishers, particularly in major markets.

Yellowbook’s push into large markets was advanced when it was acquired by British Telecom (later Yell). Major metros had once been considered too expensive for small publishers to take on, but BT gave Yellowbook the necessary financial wherewithal. Walsh’s mantra was that the then utility based incumbent publishers (one of which he now runs) charged too much for their advertising, while Yellowbook offered small business advertisers a lower cost per lead.

While it may take a little while to get a sense of where Walsh wants to take Dex Media, his appointment does raise immediate speculation about another wave of industry consolidation. Back in 2011, Walsh gave a keynote address at a BIA/Kelsey conference in which he made the case for the ultimate consolidation of the major U.S. directory publishers.

In that address, Walsh said his analysis showed that consolidating two major directory companies would help stabilize revenues declines and improve margins. Much has transpired since that presentation, including the Dex One/SuperMedia merger, which created the company Walsh now leads.

Walsh and McDonald will take questions on the transition on Dex Media’s November 4 Q3 earnings call. One question that may come up is whether Walsh still advocates consolidation.

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Yellowbook CEO Joe Walsh made a very direct case this morning for massive consolidation in the core U.S. Yellow Pages business sometime over the next couple of years. Ultimately, Walsh believes there will be a single national print Yellow Pages company, which he says will be an excellent platform to pivot to a digital business.

As moderator Neal Polachek noted, Walsh arguably fundamentally changed the U.S. Yellow Pages industry by offering a direct competitor to the incumbent Yellow Pages publisher in major U.S. markets, something that was fairly rare before the late 1990s.

That competition, based on the premise that incumbent Yellow Pages advertising was overpriced, spurred a wave of me-too competition in large markets, creating a huge oversupply of Yellow Pages in most U.S. cities. The economy and the shift to digital is beginning to correct this oversupply.

“We are seeing the fifth and sixth book begin to go away,” Walsh said. He compared this excess of competition with the more recent oversupply of daily deal companies. “We are seeing the over the top stuff starting to shake itself out, leading to a more direct and full consolidation next few years.”

On yesterday’s Future of Yellow Pages panel, Dex One Chief Strategy Officer David Sharman referenced consolidation indirectly when he expresed a desire for Dex One to gain a fully national platform to sell digital advertising solutions. Last year, Dex One was widely rumored to be a potential merger partner for SuperMedia, but that deal never materialized.

In his presentation, Walsh said his modeling shows that consolidating two hypothetical large directory businesses that are seeing roughly 15 percent annual revenue declines, as well declining EBITDA despite cost cutting, could stabilize revenue declines and eventually return to EBITDA growth within a few years.

Asked what will trigger this consolidation, Walsh said it will just take the right group deciding the opportunity is ripe.

“We are almost there. It will take a financial group that says ‘I see it, let’s go.’ Some would argue it has been sitting there for a while,” Walsh said, adding that it won’t happen this year. “But defiinitely before the next time I am here.”

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He also said a couple of things that were kind of interesting. He made a distinction not based on big versus small markets, but rather coastal versus heartland. Asked if phone books would still be around in five years, he said “Yes,” but added that in some coastal markets, the migration from print to digital usage might be completed within five years. In smaller markets in South Dakota, Mississippi and so on, print is strong today and will likely still be strong in five years. And when asked what his biggest seller is today, his answer without hesitation was “Web sites.” Click here or on the image below to watch the interview in its entirety.

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