The Kelsey Group Blog Local Media Blog 2006-03-15T13:53:04-05:00 Copyright 2004-2005 Ublog Reload 1.0.5 Charles Laughlin <![CDATA[Yell Pursuing TPI]]> 2006-03-13T11:42:37-05:00 2006-03-13T11:42:37-05:00 2006-03-13T11:42:37-05:00 here.

If this takes place, it would be a departure for Yell, which has focused all of its acquisition energy and capital on enlarging its U.S. directory business, Yellow Book. However, Yell has in the past indicated a willingness to look at deals on the European continent as well.

TPI is also expected to attract bids from private equities, which have not lost their fervor for directory deals. Less clear is the degree to which France's PagesJaunes is interested in the deal.

TPI, which reported 2005 group revenues of 654 million euros, is the leading publisher in Spain with directory operations in Brazil, Argentina, Chile and Puru, and a competitive DA operation in Italy.

Yell is the market leader in the U.K. and the largest independent publisher in the United States. It also contends with a rate cap in the U.K. that does not appear to be going away any time soon. This may help explain its interest in finding new acquisition targets.

Charles Laughlin <![CDATA[Notes and Observations From ADM]]> 2006-03-09T17:17:14-05:00 2006-03-09T17:17:14-05:00 2006-03-09T17:17:14-05:00
The ADM is in the midst of a road show, which it does every year to update national YP agencies (CMRs) on what is happening in the directory business, particularly issues affecting national advertisers. These issues are many, and many seem never to go away (national surcharges and directory extensions, to offer just two examples).

Of particular interest was a presentation by Burt Michaels of Knowledge Networks/SRI on the new Yellow Pages Market Reporter. Burt offered some detail on what the current syndicated usage measurement service offers, and what it says about what's happening in local markets. Burt was pitching (in a low-key manner) CMRs to buy the research (13 have to date) and if they have it, to dive deeper into the data with custom reports.

Burt was understandably reluctant to offer too much detail on how share breakdowns occur in local markets, though he did share data on Manhattan that had already been widely disclosed. His overarching comment says a lot about where the print directory business is today.

"Audience fragmentation is a reality that you are going to have to deal with."

While there was an initial wave of dueling press releases on the usage data, what is emerging is the picture Burt lays out. In most markets, audience is spread among two or three or more products. Not always evenly, and as Burt notes, the nature of the audiences isn't always the same. But one-book buys are probably a thing of the past in most U.S. directory markets.

One apparently touchy point is the fact that just 13 CMRs have bought the research. One questioner at the meeting raised this issue, and the ADM responded by noting the 13 represent 60 percent of national sales. Nonetheless, the question (from a publisher I believe), shows some frustration among publishers that CMRs need to step up more and buy the data they have been asking publishers to produce for several years now. In fairness, most if not all of the most vocal CMRs have already bought the research. ]]>
Neal Polachek <![CDATA[More National Consolidation]]> 2006-03-07T14:17:52-05:00 2006-03-07T14:17:52-05:00 2006-03-07T14:17:52-05:00 Neal Polachek <![CDATA[Verizon Enters Nashville]]> 2006-03-06T13:08:25-05:00 2006-03-06T13:08:25-05:00 2006-03-06T13:08:25-05:00 article. ]]> Charles Laughlin <![CDATA[TPI Suitors Line Up]]> 2006-03-05T16:05:08-05:00 2006-03-05T16:05:08-05:00 2006-03-05T16:05:08-05:00 usual suspects !" The parade of private equities whose names are listed among those at least interested in the deal includes many that have been associated with other past deals as buyers or also-rans ó CVC Capital, the Blackstone Group, the Carlyle Group and so on.

Currently Telefonica, Spain's leading telecom, owns a 60 percent stake in TPI. Telefonica, surprise, wants to offload its majority shares in TPI to reduce debt.

Also reported to be interested are France Telecom (which is the majority owner of publicly traded PagesJaunes), and Yell Group, working in concert with the private equity Apax Partners (a former part owner of Yell). Those would lead to some interested pan-European combinations.

TPI, a public company, is the dominant directory player in Spain, with a large and growing presence in directories in Latin America. It also recently launched a competitive DA business in Italy.

Charles Laughlin <![CDATA[AT&T + BellSouth = US$5.8B Publisher]]> 2006-03-05T15:53:12-05:00 2006-03-05T15:53:12-05:00 2006-03-05T15:53:12-05:00
This deal is not exactly a surprise, since it was widely reported that SBC (before it acquired AT&T and adopted its name) made a run at BellSouth before it pursued the AT&T deal. And AT&T and BellSouth's Yellow Pages operations already jointly own, a deal that led to much speculation that it was a precursor to a combined Yellow Pages operation. Well, that now appears to have happened, even if Yellow Pages was not a driving force in the transaction.

We will have a lot more to say about this deal in this week's Local Media Journal. This is a big one. ]]>
Greg Sterling <![CDATA[AT&T to Buy BellSouth]]> 2006-03-05T12:36:21-05:00 2006-03-05T12:36:21-05:00 2006-03-05T12:36:21-05:00 New York Times AT&T (formerly SBC) is near a deal to acquire BellSouth:

AT&T is expected to pay about $65 billion for BellSouth, the country's third largest phone company, which operates in a nine-state region in the Southeast. The price represents a 25 percent to 30 percent premium for BellSouth shareholders.

The Times is reporting that a deal may be announced as early as Monday. The combination would create (recreate) a communications giant with combined estimated Yellow Pages revenues of roughly $5.6 billion and approximately 3,800 sales representatives. Both AT&T and BellSouth have DSL partnerships with Yahoo! (both also have IPTV initiatives). AT&T has a market cap of $91 billion, while BellSouth is worth approximately $56 billion today.

There were numerous rumors of earlier, failed discussions between the two companies. And there has been considerable speculation in the recent past that the two companies would combine and spin off their directory divisions at some point in the future. It's not clear to me whether this deal, if it were to happen, would make that more or less likely. (My colleague Charles Laughlin would have a more nuanced perspective on that issue. However, telco parents have sold directory assets to pay down debt in many instances in the past.)

The Wall Street Journal (sub. req'd), says:

AT&T is targeting at least $2 billion in cost savings in BellSouth deal, said a person familiar with the matter Sunday ... The total equity value of the deal is at least $65 billion, plus the assumption of an additional $17 billion of BellSouth debt.

The two companies have a parternship in the newly re-energized (and Cingular, to become AT&T wireless). And I could imagine a combined company becoming more active and making some intreresting online acquisitions to better position itself on the Internet. In fact I could imagine a fairly major acquisition in the search space.

We'll go into all aspects of the transaction, including the competitive implications, if it's confirmed, later this week.


More from Reuters, MarketWatch, USAToday and many others. Here's another N.Y. Times piece (reg. req'd) that has a great deal more detail and some additional features.

Thus far in my "career" as a blogger I have resisted the urge to use the term "grok." But now I break that solemn vow with: Om "groks" the deal. ]]>
Greg Sterling <![CDATA[Legal Category: Cause for Concern? ]]> 2006-03-03T19:12:08-05:00 2006-03-03T19:12:08-05:00 2006-03-03T19:12:08-05:00 blog on legal advertising, which basically argues with some anecdotal evidence that the print directory is delivering less value to lawyer-advertisers today than it has in the past:

I get calls every week from lawyers saying theyíre not getting calls anymore from yellow page advertising. They donít want to continue wasting their money, but theyíre afraid to stop advertising and lose their spot. They want to know whatís going on and what to do.

I have no idea whether this blog is truly reflective of the feelings of lawyers generally or has any influence in the legal community. But the sentiments should be noted and are a cause for concern because lawyers spend more than $1 billion annually on print Yellow Pages and legal is, in fact, the top revenue category (lawyers-attorneys is the sixth most popular consumer category). ]]>
Charles Laughlin <![CDATA[Telefonica May Sell TPI]]> 2006-02-28T17:16:00-05:00 2006-02-28T17:16:00-05:00 2006-02-28T17:16:00-05:00
You can read about the possible sale here and here.

TPI has a leadership position in directories in Spain, along with a strong position in South America, virtually owning the market in Peru and Chile, with solid positions in Brazil and Argentina. The company also has a growing competitive DA business in Italy.

John Kelsey <![CDATA[We're No. 2?]]> 2006-02-22T16:32:52-05:00 2006-02-22T16:32:52-05:00 2006-02-22T16:32:52-05:00
Who is No. 1 among cola beverages? If you ask that question in Texas, the answer would be Dr. Pepper. If you exclude fountain sales, Pepsi sells the most nationwide. But overall, Coke is the leader. Frankly, I don't really care. I drink the cola beverage that I prefer.

In the automotive category, General Motors says Chevrolet was the top-selling brand in the U.S. last year, but Ford disagrees. Ford bases its leadership claim on third-party data compiled by auto research firm R.L. Polk. Unlike Coke and Pepsi, which combined have over 90 percent of the cola market share, Ford and Chevrolet face a significant challenger in Toyota, whose brand is closing the gap, particularly when bulk sales of vehicles to fleets aren't counted.

A medium is a different animal than a beverage or a car, but the ability to show your publication as the leader in a particular market, especially on a cost-per-use basis, can be a valuable tool. If syndicated research is here to stay, and The Kelsey Group hopes it will be because it supports our ROI story, we need to have standards that everyone who participates agrees to.

If the Yellow Pages industry wants the credibility that syndicated research gives it, headlines and claims must be reasonable. I am not suggesting that any company has not told the truth in its press releases, but it is most important that the perception by advertisers reflect reality in the particular markets in which they are trying to reach their users. Otherwise, syndicated research won't be taken seriously. ]]>
Charles Laughlin <![CDATA[YPG Looking South?]]> 2006-02-22T10:04:47-05:00 2006-02-22T10:04:47-05:00 2006-02-22T10:04:47-05:00
You can read the National Post article here.

The article is yet another sign of what we expect to see in the next few years, which is the final de-linking of Yellow Pages from telecoms in the United States.

Ownership of directories in the U.S. is becoming the bastion of private equities and strategic players (i.e., other publishers and media companies). This raises all kinds of interesting scenarios involving cross-media combinations and perhaps some very strange bedfellows.

The rationale for a telecom keeping a publisher comes down to one thing ó cash. Do they need it all right now, or would they rather keep getting it a little bit at a time? ]]>
Charles Laughlin <![CDATA[Eniro to Launch Dedicated Internet Sales]]> 2006-02-15T10:39:42-05:00 2006-02-15T10:39:42-05:00 2006-02-15T10:39:42-05:00 Local Media Journal next week.

One key revelation was that print revenues in Norway are going to decline by 10 percent in 2006. Eniro just acquired Findexa, Norway's leading publisher, and this revelation generated a lot of questions on the call about the extent of Eniro's visibility into Findexa's challenges when it bought the company. Eniro's stock was down almost 13 percent yesterday. Today it is trading about 1 percent lower.

Another notable detail is that Eniro is moving to a dedicated online sales force in Sweden. One reason Eniro CEO Tomas Franzen cited was that the publisher needed to get out of the cycle of selling online advertising based on a print publishing cycle. We are going to write about evolutions in online selling practices in an upcoming Advisory from The Kelsey Report.

Charles Laughlin <![CDATA[Berry Adding 100 Digital Reps]]> 2006-02-13T16:06:17-05:00 2006-02-13T16:06:17-05:00 2006-02-13T16:06:17-05:00 this article in the Dayton Business Journal about The Berry Company's growing online sales force. As we wrote in the last edition of Local Media Journal , Berry recently signed a deal with Marchex to upgrade its guaranteed clicks program, which the publisher tells us has been selling well, with growth at a much faster pace than IYP sales. The new reps will sell both IYP and search engine advertising. TKR will be coming out with an advisory soon that examines current best practices in IYP sales. ]]> Charles Laughlin <![CDATA[AT&T Weighs in on Syndicated Research]]> 2006-02-09T15:30:06-05:00 2006-02-09T15:30:06-05:00 2006-02-09T15:30:06-05:00
AT&T Yellow Pages (formerly SBC) is the world's largest Yellow Pages publisher, and it operates in major markets in the Midwest, Southwest and West Coast, including such large markets as Los Angeles, San Francisco, Dallas, Houston, Detroit and Cleveland.

According to its press release, AT&T has garnered an average 72.5 percent share of the 26 Yellow Pages Market Reporter studies released so far covering its markets. We called AT&T to ask if they could share any specific examples. They declined, saying that level of detail is being reserved for CMRs and advertisers. Nonetheless, a company spokesman did say that the publisher has a "major usage leadership position, except in a handful of markets."

The AT&T release makes it the fourth publisher to issue a press release touting the outcome of the synidicated research. The others are Verizon Information Services, Yellow Book and Ambassador. ]]>
Charles Laughlin <![CDATA[Hicks Quick to Expand in Canada]]> 2006-02-09T14:52:05-05:00 2006-02-09T14:52:05-05:00 2006-02-09T14:52:05-05:00 acquisition of Phone Directories' Canadian operations, U.S. buyout firm Hicks Muse is pushing an aggressive expansion into bigger Canadian markets.

Next week, Canadian Phone Directories, the Hicks-backed company led by industry veteran Olivier Vincent, will begin a sales canvass for a Vancouver, BC, phone book. The book will overlay four Yellow Pages Group directories in the city. Vincent told us the distribution will be about 700,000 and rates will be about half those of the largest of the competing YPG books.

Also, CPD will re-launch the Calgary book to give it more distribution and sales muscle. Vincent told us the new Calgary book will distribute 600,000 copies, compared with 350,000 before.

The Calgary and Vancouver directories will both publish in the fourth quarter of this year.

These two developments make it clear that CPD plans to invest in making a more serious competitive challenge to YPG, which is by far the largest incumbent in Canada, than the previous Phone Directories operation was able to do. ]]>
Charles Laughlin <![CDATA[Yell's Irritation Over Rate Cap Issue]]> 2006-02-09T11:28:13-05:00 2006-02-09T11:28:13-05:00 2006-02-09T11:28:13-05:00 solid numbers for the first nine months of its financial year, which ends on March 31. Its U.S. unit, Yellow Book, continues to post double digit gains, even when acquisitions are taken out of the picture. Results were also good in the U.K., where overall growth was 5.6 percent, and the IYP continues to accelerate, growing at 62.4 percent.

The mixed blessing is that in the U.K. Yell faces a looming decision from the Competition Commission on whether to end, minimize, maintain or intensify the rate cap that Yell now operates under. The decision is expected in August, and last month, the commission issued a glimpse into its thinking that suggests its options may have narrowed to either maintaining or intensifying the rate cap.

Yell executives, understandably in our view, have not done very well at hiding their irritation. Yell issued a stinging rebuke of the commission's statement, and has refused to back off since.

The commission seems to think that it can will a share shift into existence by curtailing Yell's ability to raise prices. We think the commission has invoked the law of unintended consequences by forcing Yell to grow through innovation and improved service (both good outcomes), and it has also given the publisher a bit of good news to bring into sales calls each year ("Good morning, prices are lower again this year!").

Rather than accept that pricing intervention has failed because it is fundamentally wrong-headed, the commission seems to think it will work sooner or later if only it causes Yell enough pain.

We see the U.K. as a competitive market, with BT and Thomson competing for share, along with a smattering of other smaller players. Is Yell strong? Of course. In the U.S., its division Yellow Book has grown as a competitive publisher by exploiting a pricing umbrella. In the U.K., that umbrella has been all but folded up by the regulators, leaving competitors out in the wet. ]]>
Charles Laughlin <![CDATA[Yellow Book in Clicks Business]]> 2006-02-08T10:35:08-05:00 2006-02-08T10:35:08-05:00 2006-02-08T10:35:08-05:00 acquired Click Forward, a Coral Gables, Florida-based search engine marketing company. Terms were not disclosed. Yellow Book plans to use the assets gained through the acquisition to develop a local search product to sell through its more than 5,000 local sales representatives.

This deal is in keeping with Yellow Book's recent push to elevate its digital strategy to a higher level. The publisher has been accused by some in the investment community of paying too little attention to digital as it pursues growth opportunities in the traditional business. This acquisition certainly helps Yellow Book break out of the perception that it is all about print. ]]>
John Kelsey <![CDATA[Mini Directories March On]]> 2006-02-03T16:38:21-05:00 2006-02-03T16:38:21-05:00 2006-02-03T16:38:21-05:00
While some of these companions are indeed poor replicas of the real thing, particularly when a normal-size phonebook is simply shrunk by about 25 percent, others can be much more pleasing to the end user. The primary way to accomplish this is by avoiding type that is unreadable.

According to eLink, R.H. Donnelley will begin to introduce companion directories in Trumbull, Ohio; Sussex, New Jersey; and Citrus, Florida. My view is that while these are not RHD's first mini directories, they are the first ones it is building specifically as companions. More are likely to follow, but I was unable to reach anyone who would comment.
Neal Polachek <![CDATA[Coldplay Tickets, NFL Football, MTV]]> 2006-02-02T11:07:10-05:00 2006-02-02T11:07:10-05:00 2006-02-02T11:07:10-05:00
Earlier this week the NFL awarded some set of games to its own NFL Network rather than the usual suspects who had bid on them ó namely Fox, Comcast, CBS and some new bidders ó Verizon in particular. That the NFL chose its own network points to the diminished role the traditional networks and carriers have in a world where the pace of convergence is accelerating. While the NFL Network's reach may be considerably smaller, it is obviously a highly targeted market that is ó oh by the way ó probably willing to pay to watch NFL games. And besides, go ask Joe's AAA Plumbing if he wants to advertise on the NFL Network ó my guess is his answer will be "where do I sign."

MTV recently launched its broadband channel targeted at the 18-24 college crowd called Uber. The site mixes professional and amateur content into a constellation of images and sounds and information that in theory appeal to the audience. The college audience has long been desired by local advertisers ó just consider the volume of burritos and pizzas consumed and you get the picture. It will be interesting to see if Uber can find a way to sell local advertising to Betty Joe's Homemade Pizza store while keeping the site sufficiently cool and edgy. ]]>
Charles Laughlin <![CDATA[Eniro Adds Click-to-Call]]> 2006-02-02T10:55:05-05:00 2006-02-02T10:55:05-05:00 2006-02-02T10:55:05-05:00 here.

Eniro plans to offer the service for free initially to its 30,000 online customers as a way to add value to existing programs. Eniro is a leading player in print and online directories and search in the Nordic markets. Its chief rivals include the major "international" search engines, including Google, with which Eniro also is a partner. Offering click-to-call is consistent with Eniro's positioning as the search and directory service that facilitates buyer-seller interaction.
Charles Laughlin <![CDATA[Dex-RHD Deal Closes]]> 2006-01-31T12:53:02-05:00 2006-01-31T12:53:02-05:00 2006-01-31T12:53:02-05:00 here.

More detail was revealed about the newly combined company's management structure. As we knew, Dave Swanson is CEO and George Burnett will lead the board of directors. Maggie LeBeau, who ran marketing at Dex, will be in charge of marketing in the new organization, and Dex's IYP chief, Simon Greenman, will play the equivalent role in the new RHD. The very top of the organization will be dominated by RHD executives, including Peter McDonald, Steve Blondy and George Bednarz. Al Duy, a longtime associate of Peter McDonald, will be in charge of information technology.

One of the decisions we will watch for is whether RHD will join forces with to achieve additional scale, or if it will ride on Dex's well-regarded IYP platform to leverage its own substantial footprint.

Charles Laughlin <![CDATA[Verizon Settles Strike]]> 2006-01-30T10:14:27-05:00 2006-01-30T10:14:27-05:00 2006-01-30T10:14:27-05:00 Here is an article with details. ]]> Charles Laughlin <![CDATA[YPC Launches Ad Campaign]]> 2006-01-30T10:02:43-05:00 2006-01-30T10:02:43-05:00 2006-01-30T10:02:43-05:00
The stakes for this campaign are fairly high. YPC has a real opportunity, given its intuitive URL, to establish itself as a premier IYP. This would be a real source of strength to YPC's owners, who are increasingly looking to the IYP as a key to restoring top-line growth.

You can read the announcement here. ]]>
Charles Laughlin <![CDATA[Yellow Book's Usage Results]]> 2006-01-27T15:37:07-05:00 2006-01-27T15:37:07-05:00 2006-01-27T15:37:07-05:00
At the CMR meeting, and in a press release issued yesterday, Yellow Book revealed data from several of the market reports released last week. You can read Yellow Book's press release here.

While Yellow Book did not win every market, it did consistently have either a plurality of usage or a strong second position (notably Chicago). There were some notable weak spots (Yellow Book came in third in Manhattan, for example), but the general picture from the data we have seen thus far is of a competitor that is going toe-to-toe with incumbents, and in some cases besting them. This was not lost on the CMRs in attendance at the Yellow Book meeting yesterday in Orange County, California. ]]>
Charles Laughlin <![CDATA[Bad Signal for Yell on Rate Cap]]> 2006-01-25T19:57:57-05:00 2006-01-25T19:57:57-05:00 2006-01-25T19:57:57-05:00 This article appeared today in the Guardian Newspaper in the U.K., regarding the ongoing review of the rate cap imposed on Yell in the United Kingdom. The Competition Commission has issued a report indicating it may extend or expand the rate cap. We will follow up with our analysis of this development in the coming days. ]]> Charles Laughlin <![CDATA[Shareholders OK RHD-Dex]]> 2006-01-25T19:47:08-05:00 2006-01-25T19:47:08-05:00 2006-01-25T19:47:08-05:00 release. The deal, which combines two of the top five U.S. incumbent publishers, is expected to formally close at the end of this month.

Here is a summary of the deal from our Local Media Journal, published shortly after the deal was announced last October:

The acquisition will form the third-largest U.S. directory publisher, with estimated combined adjusted revenues of US$2.69 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of roughly US$1.48 billion. The new company will have more than 600 titles, 1,800 sales representatives and distribution of about 73 million directories.

The acquisition will have a significant impact on the U.S. directory industry, even if it does not transform the competitive landscape. Acquiring Dex will offer RHD some additional bargaining power with search engines as it looks for ways to drive more traffic to its online customers. The deal also extends RHDís geographic coverage to 28 states, with incumbent status in 8 of the top 40 U.S. metropolitan markets. Key markets include Chicago, Denver, Las Vegas, Orlando, Phoenix and Seattle.

Greg Sterling <![CDATA[DCCI Becoming Telmetrics]]> 2006-01-23T02:26:34-05:00 2006-01-23T02:26:34-05:00 2006-01-23T02:26:34-05:00 DCCI changing its name to telmetricsóthat appeared in Ken Clarkís YPTalk blog/newsletter. Call tracking will become more important and more central to integrated online-offline campaigns in the very near future.

Call tracking will likely be the way that Google, for example, will measure the efficacy of its new radio inventoryóat least the intended direct response component.
Charles Laughlin <![CDATA[Labor Fired Up About Verizon Talks]]> 2006-01-21T15:48:35-05:00 2006-01-21T15:48:35-05:00 2006-01-21T15:48:35-05:00 here. The two sides have apparently come close to settlement, but have failed to reach terms.

We have no comment to offer on the merits of the positions in this current dispute.

This ongoing strike does lead us to wonder how well the directories industry will be able to manage labor peace given the changes taking place in this industry. In particular, how successfully will management and labor negotiate adaptations publishers are making and will need to keep making in order to remain competitive next year, in five years and a decade down the line?

Charles Laughlin <![CDATA[Verizon Quick to Leverage Usage Data Results]]> 2006-01-20T08:58:56-05:00 2006-01-20T08:58:56-05:00 2006-01-20T08:58:56-05:00 release says nothing about the degree to which it beat its competitors.

This announcement suggests syndicated research may become as much a public relations tool as it is a credible research resource for agencies and national advertisers.

What is interesting about this announcement is that it shows how much the syndicated research game is subject to spin. The syndicated research methodology has undergone tremendous scrutiny, and all participants have accepted it, so the results Verizon is touting do not appear to be in dispute. However, it really isnít necessary for Yellow Book or Ambassador to have a No. 1 market position for either of them to declare their own victory. All that is required is enough usage to make buying an ad in one of their books a good value.

We imagine this announcement will be the first salvo in an ongoing press release battle over which publisher really is the winner in the syndicated usage game. We hope ultimately everyone wins by attracting more advertisers, who now gain confidence in the medium because it has a third-party measurement program in place.

John Kelsey <![CDATA[Volt's DataNational Proves the Exception]]> 2006-01-18T16:03:01-05:00 2006-01-18T16:03:01-05:00 2006-01-18T16:03:01-05:00
On the other hand, most independent publishers were (and still are) focused primarily, if not exclusively, on the directory business. They are able to compete by charging a rate that is typically half what the incumbent publisher charges. They also compete by scoping differently and by offering smaller directories that fit neatly on top of the incumbentís book in the kitchen drawer. Not surprisingly, there is often trench warfare between the competing sales forces that leads to animosity.

Volt Information Sciences is an exception. Voltís primary business is staffing services, which accounted for 82 percent of the companyís fiscal 2005 net revenues. The telephone directory segmentís sales, including their DataNational ďCommunity PhoneBookĒ brand, accounted for less than 4 percent of the companyís sales but almost 19 percent of its total operating profit. Clearly, this is a critical business for Volt.

The telephone directory segment grew last year by $10 million to $82.3 million through a combination of expansion and sales growth in its current markets. In fact, ďDataNational was one of the first true competitors to incumbent BellSouth Advertising & Publishing in its core area markets,Ē according to our 2005 Global Yellow Pagesô report. DataNational competes against BellSouth in many of the same ways other independents rival incumbents, but the rancor does not seem to exist. DataNational CEO Jerry DiPippo is on the YPA board. Vice President of Sales Greg Shearer said that competition was good for the marketplace and that BAPCO was a tough but fair competitor.

DataNational also offers an online Yellow Pages site, It doesnít yet offer national search capabilities but rather listings for specific DataNational directories. We expect to see enhanced and expanded IYP and local search over the next year. In the meantime, Volt is an example of a company that doesnít always think that itís ďwe vs. they.Ē

Charles Laughlin <![CDATA[News Corp. Taking on Sensis]]> 2006-01-18T11:15:35-05:00 2006-01-18T11:15:35-05:00 2006-01-18T11:15:35-05:00 here.

News Corp.ís challenge is interesting on many levels, including the fact that, unlike a search engine, News Corp. takes on Sensis from the position of also claiming original, rich local business information. According to the Australian article, the News Corp. site would bring with it listings from 100 community newspapers, as well as 700,000 listings acquired with ALS. And just as Sensis has a built-in promotional platform with its print directories, News Corp. does so with its community papers.

This developing competitive match-up speaks to one key question about the directories, classifieds and local search businesses, which is whether these entities will be distinguishable (online at least) within a few yearsí time. It appears we might see one of the earliest examples of competition among truly morphed directory/classified/search products in Australia.

The Kelsey Reportģ is currently developing an Advisory that examines the intersections between directories and classifieds, in particular online.

Charles Laughlin <![CDATA[Do Blue Balloons Signal Death for Yellow Pages?]]> 2006-01-12T16:05:31-05:00 2006-01-12T16:05:31-05:00 2006-01-12T16:05:31-05:00 David Galbraith is being credited as the first to discover that Google is beginning to offer blue ďAdballoonsĒ on maps, which for now appears limited to hotels in New York City. One of Galbraithís basic conclusions is that this application will help tip print Yellow Pages over the edge into oblivion (my words, you can read his).

I think it is fair to say that map-based advertising is potentially a pretty big deal and a direct threat to Yellow Pages publishers. The list of threats is getting pretty long at this point, and yet the industry is still standing, wounded but not yet destroyed.

While map-based advertising is a higher-level threat, I stop short of buying the argument that this will be the bullet that finally fells the beast. If I can switch metaphors, perhaps this is cut No. 216 of the 1,000 required to cause death. I doubt whether the 1,000th cut will ever be administered, at least within the time frame many appear to be suggesting.

One fact worth noting is that, so far, the only participants in the adballoons product are national hotel chains. When it comes time to include local businesses (think restaurants, health clubs, dentist offices, cleaners and the like), who will bring these relationships to Google? The local sales channel may not be the impenetrable armor that some suggest, but it remains an unrivaled advantage.

Nonetheless, this is a development that directory publishers have had time to anticipate and should take seriously.

Greg Sterling <![CDATA[SuperPages Extends Distribution to MSN Local]]> 2006-01-12T13:36:16-05:00 2006-01-12T13:36:16-05:00 2006-01-12T13:36:16-05:00 SuperPages advertisers (horizontal links across the top) will appear in MSN local search results. This is an extension of Verizonís existing relationship with MSN, which provides the listings for MSN Yellow Pages. Verizon has been working aggressively to expand its network, as have other online Yellow Pages publishers.

Also very recently announced an expanded distribution relationship with Yahoo! very much like this.
Charles Laughlin <![CDATA[Spin-Offs No Sure Bet to Unlocking Value]]> 2006-01-10T14:39:37-05:00 2006-01-10T14:39:37-05:00 2006-01-10T14:39:37-05:00 BusinessWeek has an interesting take on the benefits of spin-offs, which is apropos given the likelihood that Verizon will go the spin-off route with its Information Services directory publishing unit.

A BusinessWeek study conducted by Dealogic found that ď ...the six big companies that announced spin-offs in 2005 and completed them by the first week of 2006 saw no big run-up in shareholder value as a result.Ē The magazine found that the six companies (American Express, Dean Foods, Fortune Brands, Viacom (VIA ), Liberty Media and Clear Channel Communications) generated the same 3 percent return as the S&P 500.

One reason given for the disappointing results was that these spin-offs may have been perceived as ďfinancial engineeringĒ rather than strategic responses to threats from the Internet. Will this issue haunt Verizon? Probably not, since one of its objectives is to raise money to further its investment in building a digital network. Also, the balance of experience suggests directory organizations fare better as stand-alones than under the ownership of telecoms, particularly those with strategic objectives well beyond owning the local telephone exchange.

Charles Laughlin <![CDATA[YPC in Tight with Yahoo!]]> 2006-01-06T09:08:49-05:00 2006-01-06T09:08:49-05:00 2006-01-06T09:08:49-05:00
The deal essentially consolidates existing agreements between Yahoo and both AT&T Yellow Pages (ex-SBC) and BellSouth A&P. Stubbs notes that the new deal is considerably expanded in several respects, including:

  • The new agreement includes Yahoo! Local in addition to Yahoo! Yellow Pages

  • Under the new agreement, handles national sales (through CMRs) for Yahoo! Yellow Pages and Yahoo! Local.

  • The new deal exposes all advertisers to Yahoo! YP & Local traffic, where the previous relationship with AT&T had limitations.

Look for more coverage next week. ]]>
Charles Laughlin <![CDATA[Small but Venerable Independent Sells to YB]]> 2006-01-05T16:09:21-05:00 2006-01-05T16:09:21-05:00 2006-01-05T16:09:21-05:00 Charles Laughlin <![CDATA[Syndicated Data to Be Unveiled in January]]> 2006-01-04T13:14:38-05:00 2006-01-04T13:14:38-05:00 2006-01-04T13:14:38-05:00
According to KN/SRI, 10 directory publishers participated in the study in 2005, and so far 12 certified marketing representative companies have signed up to receive the data.

While 10 publishers doesnít sound like many, the 10 that are participating account for the lionís share of U.S. directory revenue.

TKG has watched the process unfold of rekindling syndicated usage research. The process has been difficult due to complex methodology issues and conflicting interests among the participants. TKG applauds this development and acknowledges the hard work required to take this initiative this far. The next challenges include keeping the process together for the long haul and adding the participation of more publishers. But for now it is worthwhile noting that the initiative has achieved at least initial success.
Greg Sterling <![CDATA[Happy New Year!]]> 2005-12-31T23:10:15-05:00 2005-12-31T23:10:15-05:00 2005-12-31T23:10:15-05:00 Charles Laughlin <![CDATA[Sensis Exports a Strategy to Europe, Beyond]]> 2005-12-16T15:49:51-05:00 2005-12-16T15:49:51-05:00 2005-12-16T15:49:51-05:00
What Sensis is arguing is that publishers should not hand over the billing relationship with the customer -- ever. And no publisher should train users to go elsewhere to find local businesses. Yet building the index and PFP engine are not core to the value publishers bring, nor are they assets that any publisher wants to be over-dependent on to a potential long-term competitor. Platefood is offered as a chance to retain control without making a prohibitive investment. It is an enabling platform for those who wish to follow a strategy similar to the one Sensis follows in Australia.
Charles Laughlin <![CDATA[Tellier Talks About Trader Deal]]> 2005-12-16T15:46:17-05:00 2005-12-16T15:46:17-05:00 2005-12-16T15:46:17-05:00
We will cover the whole idea of directories and classifieds in greater detail within the TKR program, but we'll share a few highlights here.

Tellier sees the deal as very closely tied to Yellow Pages, since classifieds shares many characteristics. And he sees the deal as building on the assets he cares about, the YPG brand, content and customer relationships. All other things, he says only half jokingly, can be outsourced.
Here are some highlights of what we heard from Mr. Tellier:
* The Trader deal has a lot to do with YPG's upcoming plans to launch keyword search, and in particular how it can enable brand search.
* YPG has a lot of ideas on how to merge directory and classifieds content into local vertical hybrids. Imagine a Trader publication with a vertical directory of related headings in the back pages.
* The deal gets YPG into the C2C business, something directory publishers have not been very successful at to date.]]>
Charles Laughlin <![CDATA[Yellow Book Reveals Online Revenues]]> 2005-12-16T15:44:48-05:00 2005-12-16T15:44:48-05:00 2005-12-16T15:44:48-05:00
For the financial year 2005 (ended March 31), Yellow Book generated Internet revenues of US$22.2 million, up more than 73 percent over the previous year. With total revenues of US$1.52 bilion in fiscal 2005, online revenues represent less than 2 percent of Yellow Book's total revenues. Through the first half of its 2006 financial year, Yellow Book has generated US$17.9 million in online revenues, including US$2.7 million ported over from the TransWestern acquisition.

Charles Laughlin <![CDATA[Eniro Closes Door on Eastern Europe]]> 2005-12-16T15:09:02-05:00 2005-12-16T15:09:02-05:00 2005-12-16T15:09:02-05:00
The dollars (or krona) matter less than the fact that this represents the end of Eniro‚€ôs foray into Eastern Europe (if you exclude Poland, where it does pretty well). Eniro‚€ôs lesson from all this was that the costs of pursuing opportunities in underdeveloped markets far outweigh the benefits. The opportunity costs include management attention diverted from a highly competitive situation in the Nordic markets, where Eniro does most of its business.

Charles Laughlin <![CDATA[New Zealand YP Jumps Into Mapping]]> 2005-12-16T15:03:01-05:00 2005-12-16T15:03:01-05:00 2005-12-16T15:03:01-05:00 Here is an article with more detail.

Charles Laughlin <![CDATA[A Bullish Take on Yellow Pages]]> 2005-12-14T14:39:02-05:00 2005-12-14T14:39:02-05:00 2005-12-14T14:39:02-05:00 here.

Charles Laughlin <![CDATA[Verizon Deal Raising Qs About YP Future]]> 2005-12-08T17:08:50-05:00 2005-12-08T17:08:50-05:00 2005-12-08T17:08:50-05:00
We are currently working on an advisory that will offer our take on Verizon, the decision to sell, who the buyers might be and how the deal might change the industry.

Our essential view of Yellow Pages isn't changed much by the announcement that Verizon plans to sell Verizon Information Services, its YP unit. Verizon has made a rational decision, in our view. Clearly, directories are not a core strategic asset. And when Ivan Seidenberg talks about "unlocking value," what he really seems to be suggesting is: Let's sell now while we can get a lot of money for this asset. The logical extension of this reasoning is that the asset could be worth less in a few years.

This is the point the press has seized on, suggesting Verizon must know something the rest of us do not. Maybe so. However, I think the rationale for selling is pretty simple and straightforward. And while it is not a ringing endorsement of the future of Yellow Pages, nor is it as damning as some would suggest. Print Yellow Pages has a future, but a limited one. A blended directional media product set (directories, classifieds, print, Internet, voice and mobile) offers a very good opportunity to those able to execute. There is still time to get it right, but, to state the obvious, not as much time as there used to be. VIS has a better shot at getting it right as an independent company. ]]>
Charles Laughlin <![CDATA[Nice Work if You Can Get It]]> 2005-12-07T14:27:19-05:00 2005-12-07T14:27:19-05:00 2005-12-07T14:27:19-05:00
Riklin is a respected executive, and my colleague Neal Polachek was very impressed by his presentation at the Yellow Pages Today conference last month in Vienna. But US$7 million for 11 months' work is an impressive payout, to say the least.

Eniro, the leading directory publisher in neighboring Sweden, has named longtime Findexa executive Wenche Holen to the post of managing director of Eniro's Norway operations, which include the former Findexa plus Eniro's existing online-only properties. With her elevation, Holen becomes one of the most prominent female directory publishing executives in the world.
Charles Laughlin <![CDATA[Verizon Info Services on Block]]> 2005-12-05T18:13:27-05:00 2005-12-05T18:13:27-05:00 2005-12-05T18:13:27-05:00 here.

VIS had 2004 revenues of US$3.6 billion and EBITDA of US$1.7 billion. It also had a negative growth rate of 5.6 percent. VIS is reported to be commanding a price in the range of US$17 billion. This would be a blockbuster deal, and a challenging one for any single buyer to handle. All of which suggests a spin-off, which is one of the options Verizon presented in its announcement yesterday. TKG will provide more detailed coverage and analysis in the coming days, as more facts emerge.

Charles Laughlin <![CDATA[Sensis Seen as Telstra Growth Engine]]> 2005-11-30T14:53:55-05:00 2005-11-30T14:53:55-05:00 2005-11-30T14:53:55-05:00 here.

Charles Laughlin <![CDATA[Canada Lets YPG's Golden Goose Continue Laying Eggs]]> 2005-11-29T20:43:52-05:00 2005-11-29T20:43:52-05:00 2005-11-29T20:43:52-05:00 here.

The trusts were once seen as a highly specialized asset class but are now increasingly popular, with many prominent Canadian companies looking for ways to convert to tax-advantaged income trusts. One of the trust model's main popularizers has been YPG. The company has shown it can both grow and invest in the business within the trust structure, which essentially delivers all free cash back to trust unit-holders. Had the government made a different decision, YPG might have been left scrambling. And while business would have continued regardless, its valuation would likely have suffered.

Here is a comment from Tellier: "We believe the decision to cut the taxation on dividends will make Canada more competitive. The threat to productivity is not the income trust structure but the relatively high levels of taxation on corporations and individuals, and we are satisfied that the government understands this concern. Clearly they have responded to the input of Canadians from across Canada as part of this consultation process."]]>
Charles Laughlin <![CDATA[Major Market Meltdown?]]> 2005-11-16T13:47:20-05:00 2005-11-16T13:47:20-05:00 2005-11-16T13:47:20-05:00

Notably, Eniro, Seat and TPI each revealed that one way or another they are having trouble generating growth in top markets. In fact, most of their biggest markets are in the red, and one of the key culprits is higher churn rates among large accounts.

Our question is: Is this the canary in the coal mine? Or can publishers address these issues through product tweaks and adjustments to how sales are segmented, etc.? My sense is that with a lot of work, publishers can soften the blow and minimize the declines. But major markets all over the world are now battlegrounds for so many competitive media, digital and traditional, that publishers need to develop a realistic set of expectations going forward.

We will offer some details of this topic later this week in Local Media Journal.]]>
Charles Laughlin <![CDATA[SBC CFO on Yellow Pages and IPTV]]> 2005-11-16T11:09:12-05:00 2005-11-16T11:09:12-05:00 2005-11-16T11:09:12-05:00 here.

Charles Laughlin <![CDATA[What Is Dex‚€ôs Approach to Monetizing Search?]]> 2005-11-10T11:10:02-05:00 2005-11-10T11:10:02-05:00 2005-11-10T11:10:02-05:00
His response:

‚€úWe are looking at a few different monetization strategies. ‚€¶ One is to charge for the incremental usage we get from Google Local, Yahoo! Local and Yahoo! Yellow Pages in the aggregate pricing of our bundle. The 1A version of that is to not really charge directly within the bundle but to improve the value proposition and therefore incremental revenue from retention. Another option we are testing is to charge specifically incrementally for the preferred placement where we are paying cash.‚€Ě

Burnett says all three models are being tested. He promised to share results once they have them. We will provide more details of Dex's year-to-date results in Local Media Journal and in an upcoming Advisory summarizing the year to date in the global Yellow Pages industry.

Charles Laughlin <![CDATA[TPI Buys Argentine Publisher]]> 2005-11-10T10:18:52-05:00 2005-11-10T10:18:52-05:00 2005-11-10T10:18:52-05:00
Charles Laughlin <![CDATA[Yellow Pages Group's New Home Improvement Guides]]> 2005-11-04T07:20:26-05:00 2005-11-04T07:20:26-05:00 2005-11-04T07:20:26-05:00
Transcontinental will provide the content and sell into the editorial piece, while YPG will handle directory sales through a subsidiary called Snap Guides. The idea is to offer advertisers in a key directory category a more targeted product. It's an interesting and creative example of a cross-media partnership.

Here is a link to the press release.

Charles Laughlin <![CDATA[Developments in Euro Search & Directory]]> 2005-11-04T06:47:15-05:00 2005-11-04T06:47:15-05:00 2005-11-04T06:47:15-05:00 * Eniro has announced a partnership with Internet telephony player Skype to include Skype addresses in Eniro's online database of names and numbers. Skype is launching a toolbar that will allow direct connection to both Skype subscribers and conventional phone numbers.
* The Spanish publisher TPI is said to be in the process of developing its own search service, called Noxtrum. The launch is supposed to take place in December, according to European press reports.
* The German online directory has launched a free pay-per-call service using VoIP.

Charles Laughlin <![CDATA[The SBC-BellSouth Marriage that Never Was]]> 2005-11-01T16:04:15-05:00 2005-11-01T16:04:15-05:00 2005-11-01T16:04:15-05:00 article.

Charles Laughlin <![CDATA[PagesJaunes Continues Growth]]> 2005-11-01T10:40:51-05:00 2005-11-01T10:40:51-05:00 2005-11-01T10:40:51-05:00 here.

Charles Laughlin <![CDATA[Independents on Track to Parity: ADP Leader]]> 2005-10-26T13:50:43-05:00 2005-10-26T13:50:43-05:00 2005-10-26T13:50:43-05:00
My question is,why is parity so important?

I wonder whether independent publishers are better offer remaining the smaller of the two U.S. industry segments. In his remarks, Hail used underdog references, portraying independent publishers as Rocky Balboa to the incumbents' Apollo Creed (he also compared incumbents to "lumbering dinosaurs").

Being an underdog is a motivational gift from above, not to mention a powerful unifying force. Once they achieve parity, what's the next goal? And if independent publishers surpass the incumbents in share of revenue, what meaningful distinction would then exist between the two categories? How can you position yourself as an underdog when you are just as tall and strong as the "bully" across the table.

We think parity is possible but not a given. If independents continue to outgrow incumbents indefinitely, it becomes a question of how quickly they reach parity. However, we question whether any publisher based largely in print will be generating positive organic growth beyond 2010; and sooner or later expansion reaches a point of diminishing returns. So it is quite possible that share levels could stabilize at some point in the future. Will independents reach parity before this happens? Maybe, but I'm not sure why it matters.

Ultimately, we see the parity goal mostly as a rallying cry for independent publishers to keep working, keep innovating, keep expanding and keep growing. Achieving the parity goal should not be as important as the true measures of success -- sustainable growth and improving margins. Parity is about bragging rights. Business is about making money.
Charles Laughlin <![CDATA[More Consolidation in Hispanic Market]]> 2005-10-26T13:25:39-05:00 2005-10-26T13:25:39-05:00 2005-10-26T13:25:39-05:00
Charles Laughlin <![CDATA[YBR Group Buys TDC, Changes Name]]> 2005-10-14T15:31:35-05:00 2005-10-14T15:31:35-05:00 2005-10-14T15:31:35-05:00
YBR, itself newly acquired by Australia's Macquarie Bank, has changed its name to European Directories SA.

The Kelsey Group will provide some background and analysis on this deal in the next edition of Local Media Journal. In short, YBR and Eniro (following its purchase of Norway's Findexa) are now lined up as the two main competitors in the Nordic region.

Charles Laughlin <![CDATA[Income Trust Under Fire in Canada]]> 2005-10-14T15:26:04-05:00 2005-10-14T15:26:04-05:00 2005-10-14T15:26:04-05:00 the story.

Charles Laughlin <![CDATA[Article Looks at Minibook Battle in Bay Area]]> 2005-10-14T15:22:50-05:00 2005-10-14T15:22:50-05:00 2005-10-14T15:22:50-05:00
The companion issue is becoming a big one, at least in the U.S. market, as incumbent publishers roll them out aggressively as a direct challenge to independents. Here is the link.

Charles Laughlin <![CDATA[The Debate: Ads on Covers]]> 2005-10-14T15:10:46-05:00 2005-10-14T15:10:46-05:00 2005-10-14T15:10:46-05:00
We plan to explore this issue in more depth in upcoming TKG coverage. We are curious, in the meantime, what your views are on the topic. Are front cover ads an abomination, or is this a silly fuss over "branding" a commodity product, so why not take the revenue? Submit your comments to let us know what you think.

Charles Laughlin <![CDATA[Eniro Sweeping Away Noncore Assets]]> 2005-10-14T15:02:54-05:00 2005-10-14T15:02:54-05:00 2005-10-14T15:02:54-05:00

The sale price indicates the problem Eniro faced. Management was spread thin trying to stay on top of operations in markets with revenues of only a few million euros with little hope the operations would gain any real scale anytime soon.

In the meantime, Eniro faced an eroding core product in Sweden, looming competition from search engines and a brutal battle in Finland with its chief rival there. So no more Latvia, Estonia, Russia and the like. Now Eniro is doing deals like its recent acquisition of Findexa, which is right in the company's strategic wheelhouse. ]]>
Charles Laughlin <![CDATA[Back from DDC]]> 2005-10-07T14:46:02-05:00 2005-10-07T14:46:02-05:00 2005-10-07T14:46:02-05:00
It wasn't perfect, of course. There were some blue sky platitudes uttered and some selling from the stage. Not every question that needed to be asked was asked. But in general, our speakers delivered a balanced, insightful and often candid view of what is happening in this business. As an event organizer, I can't ask for more than that.

There is a real growing tension between protecting the past and preparing for the future, and this tension is leading to more thoughtfulness and some combativeness. This all was in evidence at the conference. We will be issuing an Advisory asap with some key takeaways from the event, and we will cover many of the specific story lines that emerged from DDC in next week's Local Media Journal.

Thanks to all of you who participated.

Charles Laughlin <![CDATA[It Wasn't Just a Rumor, RHD Buys Dex]]> 2005-10-07T14:43:13-05:00 2005-10-07T14:43:13-05:00 2005-10-07T14:43:13-05:00
Together, RHD and Dex will be the No. 3 player with combined revenues of roughly $2.7 billion, passing BellSouth Advertising & Publishing. Yellow Book remains the No. 5 player, with the top 2 slots held by SBC Directory Operations and Verizon Information Services.

Here is the Dex news release:

Charles Laughlin <![CDATA[Consolidation in Nordic Market]]> 2005-09-30T23:32:07-05:00 2005-09-30T23:32:07-05:00 2005-09-30T23:32:07-05:00

Eniro CEO Tomas Franzen is positioning the deal as a way to strengthen its home market position, increase cost efficiency and develop a more efficient capital structure. Also, in an era where Eniro's core business in Sweden has faltered, acquisition growth can serve as a substitute for core growth, and the increased scale gives Eniro more customers to reach with multiple product offerings.

Franzen made it clear when he joined Eniro that he would focus on strengthening Eniro's position in its core Nordic market, making peripheral markets non-strategic. Soon after, Eniro sold off many Eastern European operations. An exception was made for Poland, where the Eniro property has performed pretty well. This acquisition is certainly consistent with Franzen's pledge.

Eniro was a very strong print + online player in the Nordic market before this deal. After Findexa, it would appear that all roads to the Nordic SME market lead will go through Stockholm.]]>
Charles Laughlin <![CDATA[Coen Downgrades U.S. Ad Forecast]]> 2005-09-27T01:40:02-05:00 2005-09-27T01:40:02-05:00 2005-09-27T01:40:02-05:00
Coen cited the lack of Olympic and political advertising, among other factors, for the reduction of U.S. advertising growth. We find this explanation curious, since those factors were clearly visible in December 2004. Other factors noted include higher TV prices and fear of running afoul of Sarbanes-Oxley regulators.

Whatever the cause, the downgrade may not be very significant for the directory industry, since few if any of the cited causes will have a major impact on print or online Yellow Pages. Rather than fear the uncontrollable, the directory business should remain focused on its core challenges, which include finding a relevant position in a rapidly changing marketplace.

There are some signs of success, or at least hopefulness, out there. The Dayton (Ohio) Business Journal just profiled local company Berry Co. The article notes that Berry is considering building a new call center, in large part to handle the additional capacity it will take on to handle sales of, which is co-owned by Berry's parent, BellSouth.
Charles Laughlin <![CDATA[RHD Reported in Pursuit of Dex]]> 2005-09-21T16:41:03-05:00 2005-09-21T16:41:03-05:00 2005-09-21T16:41:03-05:00
The Kelsey Report will issue an Advisory that explores the possibilities this deal represents, including the broader implications for the Yellow Pages industry. It is important to note that the deal is far from a certainty, based on the reporting out today. Dex Media CEO George Burnett will speak at a Goldman Sachs investor conference this afternoon, and we will listen in to hear what he has to say.

Charles Laughlin <![CDATA[Yellow Pages Arbitrage?]]> 2005-09-19T10:05:48-05:00 2005-09-19T10:05:48-05:00 2005-09-19T10:05:48-05:00

The two properties involved are the Steel Valley and Ohio Valley directories, which have combined distribution of 225,000. What is interesting about this deal is that User-Friendly had acquired these books (and two others) only a few months ago from Champion Directories, a small Ohio-based independent.

We do not know the values of the two deals, so we have no way of knowing if User-Friendly made or lost money here (our guess is they made money). The quick flip by User-Friendly suggests it is either engaging in arbitrage Yellow Pages style, or perhaps it simply didn't see these two directories fitting into its long-range plans and sold them to the most logical buyer on the market today.

The deals certainly underscore the observation that deal flow in the U.S. independent sector is constrained only by the availability of willing sellers and properties the consolidators are interested in buying. So far, the supply of neither appears to have been exhausted.

Charles Laughlin <![CDATA[PE Group Buys Yellow Brick Road]]> 2005-09-19T10:05:39-05:00 2005-09-19T10:05:39-05:00 2005-09-19T10:05:39-05:00
TKG will provide more coverage of this deal and the Yell acquisition of TransWestern Publishing in an upcoming Advisory and in this week's Local Media Journal.

Charles Laughlin <![CDATA[Google and Yell Group]]> 2005-09-11T13:19:48-05:00 2005-09-11T13:19:48-05:00 2005-09-11T13:19:48-05:00 this item on, which reports that Google may be pursuing an acquisition of Yell Group, the UK-based company that operates Yell in the UK and Yellow Book in the US.

We do not yet know whether this is substantive or pure speculation that has taken on a life of its own. We hope to find out soon enough. What adds some weight to the rumor is Google's existing relationship with Yell in the UK.

What we do know is that a deal like this makes sense, at least on paper. Google has a powerful online brand, vast organic traffic and the ability to rapidly deploy new technologies. Yell Group, solves the "last mile" problem for search engines moving into local. Yellow Book is uniquely attractive because of its wide geographic coverage, and Yell is ubiquitous in the UK.

So theoretically, this makes sense. Whether it will happen remains to be seen. ]]>
Charles Laughlin <![CDATA[RHD Sees the Light on Cover Ads]]> 2005-09-02T00:51:43-05:00 2005-09-02T00:51:43-05:00 2005-09-02T00:51:43-05:00
Too many books have taken on an indistinguishable appearance as they cave into the temptation of premium revenue and fail to protect their identity as a directory brand. The cover is where publishers advertise themselves. There is plenty of space elsewhere in the book for customers to promote their wares. Usage is king, and cover ads are not beneficial to usage. Hats off to RHD for making this decision, which may product a short-term revenue hit, but will pay off over the long haul.

Charles Laughlin <![CDATA[Yellow Pages Scams Alive and Well]]> 2005-09-01T23:56:24-05:00 2005-09-01T23:56:24-05:00 2005-09-01T23:56:24-05:00
I came across an article in a Long Beach, California, newspaper that details a classic bogus YP scam by Yellow Pages Inc. of Anaheim, California. The company sends SMEs a check for US$3, the endorsement of which is a contract to purchase advertising with a price tag of US$180.00. Anyone who doesn't pay immediately is contacted by an aggressive bill collector, according to the newspaper article.

These schemes are brilliant in their simplicity and in their exploitation of the generic nature of the Yellow Pages brand. It also shines a light on this industry's inability to build strong individual brand identities, which one would think would make these scams less effective.

We do not wish Yellow Pages Inc. well. It is hard, however, not to marvel at how enduring and successful this scam has been, despite a lot of bad publicity, aggressive law enforcement efforts and the efforts of industry organizations and individual publishers to raise public awareness.

Charles Laughlin <![CDATA[YPC Goes with SBC Agency]]> 2005-09-01T10:08:25-05:00 2005-09-01T10:08:25-05:00 2005-09-01T10:08:25-05:00 AdWeek reports this week that has selected SBC's longtime advertising agency GSD&M to handle the advertising account for, the company jointly owned by SBC and BellSouth. The magazine estimates the size of the account at US$4 million. This news comes on the heels of the redesign of the site, which serves as something of a preview of what the upcoming combined SBC, BellSouth and YPC online directory will look like. That launch is expected later this year.

Charles Laughlin <![CDATA[BellSouth Announces It Has Hit 20M Monthly Searches]]> 2005-09-01T10:07:45-05:00 2005-09-01T10:07:45-05:00 2005-09-01T10:07:45-05:00
You can read the full press release here.

The announcement seems to be part of a wave of activity by and its owners, BellSouth and SBC, as they move toward the launch of the new site, expected later this year. There seems to be a sense of urgency to establish YPC and its owners' online bona fides. As noted in an earlier post, YPC has launched an updated site, and has given SBC's ad agency, GSD&M, the account for an estimated US$4 million ad campaign to help put YPC on the map.

Charles Laughlin <![CDATA[Verizon to Buy MCI for US$6.6 Billion]]> 2005-08-25T08:18:54-05:00 2005-08-25T08:18:54-05:00 2005-08-25T08:18:54-05:00
In another sense, the impact could be more profound that in the last wave back in the late 1990s. As SBC absorbs its acquisition of AT&T, and as Verizon does the same with MCI, the two companies may look to ‚€únon-core‚€Ě assets as sources of cash. We believe SBC has resisted this temptation because it loves the cash flow of directories and hasn‚€ôt had a good reason to let go of the business. Until now, perhaps.

Verizon has certainly enjoyed the cash its directories unit provides, but the recent pattern of sell-offs in Europe and Canada suggests that corporate leaders are comfortable with disposing of directory assets if it makes sense for the business.

Add it all up, and the evidence is building of a possible fresh round of directories sell-offs, or more likely partial sell-offs.]]>
Charles Laughlin <![CDATA[Choice Comments from YPA Las Vegas]]> 2005-08-09T09:36:00-05:00 2005-08-09T09:36:00-05:00 2005-08-09T09:36:00-05:00
The YPA annual meeting was packed with industry luminaries answering (or trying to avoid answering) the basic questions that drive the future of this business ‚€ď where will growth come from, what will happen with spin-offs and consolidations, will publishers be the real winners in digital directories, and where is the true innovation in this industry coming from?

Here are some of my favorite comments from the day, with some effort to put them into context.

SEMPO President Barbara Coll, at the end of a tour through ‚€úher world‚€Ě of Bay Area digeratti, asked a rhetorical question that cuts to the chase of all the questions being asked about when we will reach the tipping point where digital dominates usage and revenue, and print becomes a secondary product.

‚€úHow many years before there are computers in the kitchen?‚€Ě More to the point, how long before we all have computers in our kitchens that will initiate a local search by voice command while we are chopping onions?

On the financial guru panel, Morgan Stanley‚€ôs Adam Shepherd said that based on the numbers, the odds of another large U.S. telco selling its directory unit are about ‚€ú50/50.‚€Ě However, the fact that SBC and probably Verizon will be busy absorbing major mergers makes that eventuality much less likely, at least in the near term.

On an international publisher panel, Lyle Wolf (known as the father of the modern Chinese Yellow Pages industry even though he‚€ôs from New Jersey) calls China the ‚€úlast frontier‚€Ě of the global Yellow Pages industry, noting that directory revenues in China are growing at 50 percent to 100 percent per year.

On the same panel, R.H. Donnelley CEO Dave Swanson made it clear he understands what drives this business when he said, ‚€úGrowth in product usage is the number one metric that we focus on.‚€Ě

From the Presidents‚€ô Panel:

Dex Media CEO George Burnett was the only incumbent publisher to answer the question, ‚€úWhat independent publisher presents the biggest challenge in both print and online over the next 18 months?‚€Ě

Burnett‚€ôs answer was that ‚€úThere is no doubt that Yellow Book is our biggest and toughest competitor.‚€Ě He also said that independents in general are vulnerable on the digital front, because they have underinvested and lack the footprint in most cases to have much of an impact online.

Verizon President Kathy Harless, whose company engaged in a bitter lawsuit with Yellow Book, was nudged by her co-panelists to answer the following question, ‚€úAre the independent publishers competing fairly?‚€Ě

Her answer: ‚€úMost independents do. The record stands for those who don‚€ôt.‚€Ě

Many of the written questions appear to have been sent up to the podium by frustrated CMRs. One on directory extensions elicited a consistent response from the incumbent in publishers, which was that extensions have been driven by accounting issues lately, that the worst is over, but publishers will commit only to minimize but not eliminate the practice.

The lone independent on the panel, Gerry DiPippo, drew applause when he said that advertisers deserved to have books publish on the timetable that they are led to expect, every 12 months.

Charles Laughlin <![CDATA[Aptas, ISX, YPsolutions Form Local Matters]]> 2005-08-01T10:36:54-05:00 2005-08-01T10:36:54-05:00 2005-08-01T10:36:54-05:00
Perry Evans, the Aptas founder who is leading the new venture, discussed the merger with The Kelsey Group at our recent Drilling Down conference in Santa Clara. He said the three companies offer complementary technologies and together create a complete solution for "local digital infrastructure." Evans believes this is a huge opportunity that requires a "well-funded leader" to execute.

Aptas and YPsolutions bring together different customer sets. Aptas counts among its customers Dex Media and the Australian publisher Sensis, while YPsolutions' clients include R.H. Donnelley and Phone Directories.

ISX is clearly part of the mix to create technologies for publishers to launch viable voice-enabled directory services. ISX powers the Sensis 1234 DA service in Australia, among other projects. Evans believes the shift from consumer pay (the current DA model) to more ad-supported services is coming soon. He expects to begin seeing some initial product rollouts in the "hybrid voice-Internet" space beginning in 2006, and he expects his new venture to be part of that progression.

Voice remains a longer-term opportunity -- maybe three to five years before the big payoff. The near-term benefits of the merger include collective stability from sharing infrastructure and funding sources. YPsolutions and ISX will certainly see a boost in R&D exposure, since Evans notes Aptas was spending between US$8 million and US$10 million on R&D. Cross-selling is another clear opportunity. Aptas now has a established base of customers in the independent segment that it could conceivably upsell with a broader mix of technology products. Evans notes that YPsolutions has developed technologies that are well targeted to smaller publishers, including the ability to take a PDF file and transform it into searchable content.

Broadly speaking, the opportunity comes from offering a full range of solutions for publishers looking to enable their business to complete in the local directional media space -- offering searchable data, performance-based pricing and a seamless multi-platform delivery of advertising content.

Local Matters combines into a company of some substance, with 40 customers and installations in about 18 countries, with 150 employees, Evans tells us. The new company will maintain current staffing and independent organizations through 2005, but a long-term reorganziation is inevitable, and no doubt necessary to extract all available synergies.

The Aptas board will become the Local Matters board, which includes former BellSouth A&P President Don Perozzi and former R.R. Donnelley CEO John Walter.

Charles Laughlin <![CDATA[UK Regulator Seeks Investigation into Directories Market]]> 2005-07-29T19:27:22-05:00 2005-07-29T19:27:22-05:00 2005-07-29T19:27:22-05:00
The agency appears to want highly distributed market share, less profitable market leaders and less expensive advertising choices for small businesses. The OFT has since 2001 placed Yell, the market leader, under a strict rate cap, equal to the rate of inflation (retail price index) less 6 percent. From 1996 to 2001 the rate cap was RPI minus 2 percent. The OFT‚€ôs announcement does not guarantee a renewal of the rate cap, nor does it suggest that a rollback is very likely.

The Kelsey Report will cover this issue in greater detail this week in the Local Media Journal as well as in an upcoming Advisory.]]>
Charles Laughlin <![CDATA[Eniro Digs Itself Slowly Out of Core Product Hole]]> 2005-07-28T09:11:09-05:00 2005-07-28T09:11:09-05:00 2005-07-28T09:11:09-05:00

It appears that some of the measures the publisher has taken to stem the decline, including a product overhaul, process improvements, pricing changes and a sales reorganization, are starting to take effect.

The Kelsey Group will produce a detailed Advisory in August that takes a look at half-year results and analyzes what they say about the direction of the global Yellow Pages industry in 2005. ]]>
Charles Laughlin <![CDATA[Swedish Businesses Following Consumers Online]]> 2005-07-18T00:59:30-05:00 2005-07-18T00:59:30-05:00 2005-07-18T00:59:30-05:00

This item has both good and bad news for Sweden's directory industry, which has already gone multi-platform. In 2004, market leader Eniro generated almost 33 percent of its revenues in Sweden from online and voice services (including DA).

One possible inference from the apparent disconnect between advertisers and consumers is that advertisers are ahead of consumers in terms of adopting online advertising. Another is that online advertising has done a better job of alienating than persuading consumers.

However, when 72 percent of Swedish advertisers (a number derived from a sample of just 89) say they use online advertising, it can't just be based on following the fad. Swedish consumers are online and advertisers know they need to be there. The key perhaps is to be there when consumers look for them, rather than trying to force themselves into the consumer's field of vision. This speaks to the power of online directional media.
Charles Laughlin <![CDATA[TransWestern to 'Explore Strategic Options']]> 2005-07-05T11:21:31-05:00 2005-07-05T11:21:31-05:00 2005-07-05T11:21:31-05:00

One question of course is, who is the likely buyer? Yellow Book always comes to mind whenever the sale of any major independent comes up (or any independent for that matter). Another private equity transaction is always a possibility. Or what about another media player? Hearst bought White in order to broaden its customer and content base, not to mention its cash flow and revenue stream. Who's to say another media player won't show an interest in a company that has revenues of close to US$400 million and an EBITDA margins of around 30 percent?

Charles Laughlin <![CDATA[YBR Sale Gets Green Light]]> 2005-07-05T09:07:28-05:00 2005-07-05T09:07:28-05:00 2005-07-05T09:07:28-05:00

Charles Laughlin <![CDATA[Sensis Enters Online Recruitment Business]]> 2005-07-01T17:25:54-05:00 2005-07-01T17:25:54-05:00 2005-07-01T17:25:54-05:00

The online recruitment advertising business is said to be worth 2 billion Australian dollars.

The Kelsey Group will address the issue of convergence between the directories and classifieds businesses in a session titled, Creating Cross-Media Synergies, at our Directory Driven Commerce Conference, which takes place Sept. 27-29, 2005, in Denver.

John King, who is in charge of the classifieds business for Sensis, will be among the panelists.

TKG will cover the LinkMe announcement in greater detail in next week's Local Media Journal.]]>
Charles Laughlin <![CDATA[Publishers Face Universal Challenges]]> 2005-06-28T07:57:56-05:00 2005-06-28T07:57:56-05:00 2005-06-28T07:57:56-05:00
What we discovered is the issues facing directory operators in Bogota are essentially the same ones faced in the United States, and to a large measure in Europe and other developed directory markets: How to keep the core directory relevant to a consuming public that is growing accustomed to finding information online.

Colombian consumers with Internet access interviewed in the focus groups expressed a similar tendency to use the Internet less than those without access, and are more likely to turn to search engines to find out information about local businesses.

While we must always note the limitations of focus groups, the consistency of the findings is striking to us. And the fact that these results are similar in what is perceived to be a developing market is all the more interesting. ]]>
Charles Laughlin <![CDATA[Bain Wastes Little Time Selling SuperPages Canada]]> 2005-05-20T07:01:58-05:00 2005-05-20T07:01:58-05:00 2005-05-20T07:01:58-05:00 Yellow Pages Group announced it will buy the SuperPages Canada business, which Bain Capital had acquired from Verizon back in September for C$1.98 billion. Today, the price is C$2.55 billion.

We haven‚€ôt yet listened to the conference call explaining the deal, but it is no secret that YPG was an eager suitor the last time this property was for sale (way back in 2004), and clearly it never gave up on the idea of creating a national platform for it print and online directories business.

It‚€ôs worth noting that the price went up by a half billion Canadian in the time Bain owned the asset. It is also interesting that Bain took the decision late last year to close rather than sell its Eastern Canadian operations. That decision certainly makes it easier and cleaner for YPG to acquire the Bain assets, since there is now no market overlap.

And the incredibly brief holding period by Bain may suggest a general trend toward shorter holding periods. 3i and VSS have signaled a possible quick exit from Yellow Brick Road in Europe.

We will have more coverage of this deal in Local Media Journal later this week.
Charles Laughlin <![CDATA[Dateline: EADP Roma]]> 2005-05-19T15:02:22-05:00 2005-05-19T15:02:22-05:00 2005-05-19T15:02:22-05:00
A hot discussion topic was Yell's recent decision to partner with Google in a manner similar to the deal struck by Yellow Pages Group in Canada, sharing data in exchange for offering advertisers exposure to the search engine's enormous traffic. The deal has resurfaced debate over which course is best -- partner now to protect customers relationships, or make a decision to compete and own the entire value chain.

Guille called search the first directly competitive medium to emerge in the history of Yellow Pages. ‚€úThe difference is that search uses the same sales arguments as Yellow Pages, interacts [with the user] at the same moment that a purchase decision is being made.‚€Ě

PagesJaunes commissioned Nielsen to study comparative reach of search properties in European markets. It basically showed that Google dominated most markets. One exeption was Sweden, where Google had 32% share, while adding together the various Eniro properties came to just under 40%. Shows that market position determines a lot of the strategy a given player follows. PagesJaunes also extrapolated results to show that IYPs monetize local searches at a much higher revenue per visit than search engines.

eBay's Gil Penchina, who runs Southern Europe, came to discuss its evolution of working with SMEs. One of his most interesting comments was that eBay sees the value of structured data that directories possess, and the online auction company is trying to make its data (particularly small business) more structured, and therefore usable, translatable, etc. using more forms and templates .

Charles Laughlin <![CDATA[Yell the Best Buyer for TWP]]> 2005-05-18T08:22:02-05:00 2005-05-18T08:22:02-05:00 2005-05-18T08:22:02-05:00
What does the rest of the global YP community think of the deal? Did Yell pay too much, get a bargain? To what degree does this enhance Yellow Book's position in the U.S. directory industry?

Bobbi Loy Luster <![CDATA[Go Pages Left with No Where to Go]]> 2005-04-07T09:06:37-05:00 2005-04-07T09:06:37-05:00 2005-04-07T09:06:37-05:00

The Go Pages were mobile directories, meaning a smaller-size directory meant to be stored in one‚€ôs vehicle, that offered select headings, guides, maps and coupons. The magazine-style book offered no White Pages.

BAPCO, SBC and Dex have all dabbled with ‚€úon-the-go"-type mobile directories for a few years, and BAPCO and Dex have recently implemented changes to re-brand and re-position these types of directories. Meanwhile, other publishers, including independents Hagadone and MacGregor, are claiming success with their mobile directories. DataNational has tested a ‚€úvisor-sized‚€Ě mobile directory in Northern Virginia. Europeans such as Findexa and PagesJaunes also offer mobile or mini-directories in select markets.

It is probable that with the pending YPG purchase of ADS that ADS is discontinuing its non-performing products. However, it is an interesting product to be discontinuing as mini-directories, also known as midis, have been ‚€úall the rage‚€Ě in the U.S. and in select European countries in recent years. An increasing number of publishers are looking at midis as one of their biggest opportunities for growth in the core product moving forward.

Charles Laughlin <![CDATA[User View Datapoint Raises Questions, Ire]]> 2005-03-31T09:07:20-05:00 2005-03-31T09:07:20-05:00 2005-03-31T09:07:20-05:00
One of the many findings from this research got our attention, and we felt compelled to communicate this information to our clients. We did so in the form of an Advisory issued earlier this week with the intentionally bland title, A Research Advisory: User View II.

Those of you who are TKG clients have already seen the note, and for the rest of the Yellow Pages community, here is the bullet: We asked the question, ‚€úIn the past year, which of the following sources of information have you used or referred to when shopping for products and services in your local area?‚€Ě Respondents were given a list of choices that included printed Yellow Pages, newspapers, Internet Yellow Pages, search engines, online shopping sites and direct mail, among other choices.

The results showed a meaningful decline in the number listing printed Yellow Pages from the first wave of User View in October 2003 to the second wave, conducted in February 2005. The decline was from 75 percent to 62 percent listing Yellow Pages among the resources used in the past year to find information on local businesses.

Is this evidence that the business is in a freefall? Of course not. At the very least, it does suggest to us that more research is needed to determine whether printed Yellow Pages is losing some of its stature as a primary resource for information on local businesses, amid a growing list of media choices, including increasingly robust local search.

The Yellow Pages industry can respond to this kind of data in a variety of ways.

It can ask hard questions about the true meaning of the findings. We encourage such questions, and we will engage anyone with standing in this industry in a discussion of the User View research, how it was conducted and how we interpret it.

Another response is to declare the end of Yellow Pages as we know it. This is certainly not the conclusion we have reached. We‚€ôve said it before and we‚€ôll say it again, the Yellow Pages has more competition than ever before, but it also retains tremendous power and continues to make a lot of money for its advertisers.

The industry can discourage ‚€únegative‚€Ě thinking about the business. We certainly welcome comments from anyone who takes this view.

Finally, the industry can see the User View datapoint as one of many bits of evidence, some of them apparently contradictory, that as a whole point to the need for an aggressive effort to promote the core directory product while simultaneously preparing vigorously for the inevitable shift in the revenue mix toward one weighted far more heavily toward digital. This shift is already taking place, and we expect it only to accelerate.
Charles Laughlin <![CDATA[London Times Reports Yell to Make Play for TWP]]> 2005-03-31T09:05:09-05:00 2005-03-31T09:05:09-05:00 2005-03-31T09:05:09-05:00
This report comes as no great surprise to us, since Yell has a well-stated ambition to achieve a true national footprint for its Yellow Book division. As it stands, Yellow Book, the largest competitive publisher in the U.S., is in the best position among U.S. operators to declare itself a national publisher. Buying TransWestern would further enlarge Yellow Book‚€ôs footprint, as well as its base of revenue. Assuming the Times report is true, the burning question is how much is Yell willing to pay, particularly if multiple bidders drive up the price?

The general consensus has been that TransWestern could fetch upwards of US$1 billion. Yell‚€ôs most likely competition will come from private equities, which still hunger for Yellow Pages deals that have generally performed well, and at times spectacularly, for investors.
Charles Laughlin <![CDATA[SBC Takes Aim at Competitors in New Ads]]> 2005-03-11T08:35:22-05:00 2005-03-11T08:35:22-05:00 2005-03-11T08:35:22-05:00

We haven‚€ôt seen the ads yet, just the description provided in the Adweek story. But it appears SBC has spared nothing. The spot from GSD&M in Austin, SBCDO‚€ôs longtime agency, follows a fairy tale motif and is directed by Francis Ford Coppola‚€ôs son Roman (no doubt trying to catch up with his sister Sophia). The ad features a voiceover from veteran character actor Roscoe Lee Browne.

Aside from the spot‚€ôs production value, there a few things here worth noting.

First, SBC‚€ôs newest efforts reflect a general trend toward investing more in promotion of the printed Yellow Pages. Publishers worldwide tell us that they are spending more these days, in most cases as a direct response to competition.

SBC‚€ôs decision to call out the ‚€úDifferent Book‚€Ě also reminds us of the tactic used by Yellow Book (not the ‚€úOther Book‚€Ě) of using broad humor and images to convey the sense that there is only one option available that can be relied upon to provide complete, accurate and relevant information. In the spot, for example, a dog owner using the ‚€úDifferent Book‚€Ě mistakenly arrives at a veterinarian that caters exclusively to cats.

And some comments from the people behind the campaign, as quoted in Adweek, are also revealing. Jonathan Silverstein, an account director, said the ads were trying to bring back a sense that the Yellow Pages is a ‚€úmagic book.‚€Ě

He says: ‚€úThey were great at one time ‚€ď you got everything. But almost like a fable, something bad happened. Something needed to be corrected.‚€Ě

Silverstein also acknowledges that the success of SBC‚€ôs competitors was top of mind as the spots were created. ‚€úThey needed to make a statement, remind people that there is a choice and a quality difference.‚€Ě

Charles Laughlin <![CDATA[Fear and Backslapping in Las Vegas]]> 2005-03-10T12:07:50-05:00 2005-03-10T12:07:50-05:00 2005-03-10T12:07:50-05:00
We heard a lot of cheerleading about the Yellow Pages, but much of it was backed with data and thoughtful arguments. What, if not a trade association, is going to find the glass-half-full way of viewing things?

The morning‚€ôs basic talking points to the YP faithful were: Usage is stable; heck, even young people are using the printed Yellow Pages; investors love us; but let‚€ôs not be complacent since we have to make sure we optimize our online opportunity if we want to succeed long term.

As an aside, could we please declare a moratorium on the whole ‚€úevery threat is also an opportunity‚€Ě clich√©?

Here are some interesting tidbits from this morning‚€ôs speakers:

Outgoing association chair and Dex Media CEO George Burnett hinted that there may be some bumps on the path toward adopting an industry-wide syndicated usage program, which has been in development for months with the general expectation that a program would roll out this year.

In his remarks, Burnett said the industry has made ‚€úreal progress‚€Ě on syndicated research, but added with some emphasis that a lot of work remained and that Dex was committed to making sure that ‚€úall references regardless of platform are included.‚€Ě

Later, on a panel on national Yellow Pages issues, Ketchum Directory Advertising President Gene Daly drew scattered applause when he remarked that the increasing complexity in competitive directory markets, ‚€úpoints to the need for syndicated research,‚€Ě and expressed some fears the effort may be stalling.

Finally, also on the national panel, Kathy Geiger-Schwab of the Berry Co. made this remark, responding to a question about which competitive media are most vulnerable to a competitive attack from Yellow Pages: ‚€úThe distraction of going after brand and direct marketing has prevented us from conducting an all-out assault on the Internet.‚€Ě Amen.
Charles Laughlin <![CDATA[Eniro Tries to Right Its Ship]]> 2005-02-20T16:58:23-05:00 2005-02-20T16:58:23-05:00 2005-02-20T16:58:23-05:00
Eniro is a very progressive directory organization operating in several very progressive markets (including Sweden, Denmark, Norway and Finland) as well as some developing markets like Poland and Russia. It is probably fair to say that the company made too early a transition from a print company with an Internet business to an Internet company with a print business, particularly in Sweden, its largest market. Eniro has paid for this with a dramatic drop in Swedish print revenues.

New CEO Tomas Franzén (there for less than a year) quickly grasped the problem and went into full turnaround mode. The full results will not be known for another year, but he deserves credit at least for generating a lot of activity that appears pointed in the right direction. Eniro has redesigned its Yellow Pages product, retrained its sales force, adjusted compensation to stop motivating the wrong behavior, and it has attacked inefficient processes that led to sky high rejections rates on new contracts.

In some respects, Sweden, given its position as an early adopter of new technologies, is positioned to be a canary in the coalmine for the eventual erosion of printed revenues. But Eniro had proved a poor early warning system to date, since many of the declines were the result of self-inflicted wounds and came much earlier than necessary.

Now that Eniro is improving its operations and looks to be on the road to stabilizing its print revenues in Sweden, perhaps it can once again become a harbinger of the future course of printed directory usage and revenue. For now, the company deserves credit for attacking its problems aggressively and, it appears, with measures that are customer focused.

Charles Laughlin <![CDATA[Private Equities Get ‚€úAmarillas‚€Ě Fever]]> 2005-02-16T10:31:56-05:00 2005-02-16T10:31:56-05:00 2005-02-16T10:31:56-05:00

Do we think they will be successful? Yes, but only to a point. Too many of those supporting this business model read too much into the demographic data. Yes, a larger share of Americans will be of Hispanic origin in the coming years. This doesn‚€ôt automatically translate into a parallel Yellow Pages universe conducted in Spanish.]]>
Charles Laughlin <![CDATA[Is Sensis the Next One on the Block?]]> 2005-02-08T11:30:52-05:00 2005-02-08T11:30:52-05:00 2005-02-08T11:30:52-05:00 on Feb. 8.

Within the same news cycle, Telstra issued this brief statement in response to The Age story:

‚€úWith respect to the speculation in today‚€ôs Age newspaper in relation to Sensis Pty. Ltd., the Telstra Board continuously monitors and reviews the company‚€ôs businesses. However, the Telstra Board has taken no decision to sell Sensis Pty. Limited.‚€Ě

Ben Bradlee, the legendary former editor of the Washington Post, might have called this statement a ‚€únon-denial denial.‚€Ě

According to The Age, the public float is expected to take place ahead of the government‚€ôs auction of its remaining 51.8 percent stake in Telstra. The story suggests Sensis would command in the range of A$10 billion (about US$7.5 billion), which would amount to roughly 15 times 2004 EBIT, a rich multiple to be sure, but we would expect the company to go for a premium valuation.

We have long seen Sensis as one of the top operators in the global directional media industry. This is particularly so because of its efforts over the past few years, under recently departed CEO Andrew Day, to build a diverse product mix designed for a future that is not reliant on print revenues, and after improving internal processes and customers satisfaction levels to enable the company to execute on a broader media strategy.

What do you think? Is Sensis worth such a high multiple? How will the float change the direction of the company? And what, if any, reverberations will there be around the industry if The Age has this story right?

Charles Laughlin <![CDATA[Competition Picks Up Steam in the UK]]> 2005-02-02T11:18:16-05:00 2005-02-02T11:18:16-05:00 2005-02-02T11:18:16-05:00
This represents a significant upping of the ante by BT, which spent 3 million pounds last year, as it completed the full rollout of 171 combination White Pages and classified directories. BT, which once owned the market leader Yell Group, now has made it clear that it intends to snatch away market leadership from its former subsidiary.

This seems a tall order given BT has perhaps a 10 percent market share today, and that Yell‚€ôs Yellow Pages is a ubiquitous, well-managed brand in the UK. However, BT is also a powerful brand, and the company doesn‚€ôt lack for resources. We think ambitions of parity are at least some part bravado, but a sufficient commitment of resources and solid execution could conceivably result in a significant share shift.

Adding to this ratcheting up of the competitive intensity level in Britain is the steady emergence of Trinity Mirror. The regional newspaper chain successfully launched a classifieds directory in Edinburgh, Scotland, last year, and is trying to repeat its success in Glasgow, a more challenging market. Now the UK has an apparent fourth major directories player, making it one of the most competitive markets in Europe.
Charles Laughlin <![CDATA[My Breakfast with Condron]]> 2005-02-02T11:08:40-05:00 2005-02-02T11:08:40-05:00 2005-02-02T11:08:40-05:00

Over his porridge, Condron talked about the state of the business today, and what makes his company tick. A few of his comments would make for good motivational posters (if such a thing as a droll motivational poster actually existed) in the conference room at any directory publisher around the globe:
‚€úIf you hire mercenaries, you get a mercenary organization.‚€Ě

‚€úThis is a simple business made complicated by people who really don‚€ôt understand the basics.‚€Ě

Not once did he use the word ‚€úparadigm.‚€Ě

Bobbi Loy Luster <![CDATA[Find YP‚€ôs eRates and Data to Compete with YPA]]> 2005-02-02T11:07:52-05:00 2005-02-02T11:07:52-05:00 2005-02-02T11:07:52-05:00 eRates and Data.

eRates and Data is a Web-based database that provides the same data as YPA‚€ôs product as well as color maps of directory distribution areas, full lists of headings available in each directory, CPM calculations for each ad type, as well as other general demographic data by market. Another key difference is that electronic publishers can participate to provide data on their geo-targeted ads and keyword pricing for local search products.

For smaller publishers, Find YP seems to offer a chance to participate in a rates and data product that is not cost prohibitive -- as some view the YPA‚€ôs offering. Moreover, it gives those same smaller publishers exposure to the CMR community and thus national ad dollars; hence, the backing of the product by the Association of Directory Publishers (ADP). Also, from an ease of use standpoint, Find YP‚€ôs Web-based concept seems like a winner in theory. Currently YPA requires members to purchase CD-ROMs or monthly comma-delimited file uploads.

While the product is likely to gain traction in the independent publisher community, it is difficult to say if larger publishers will change the way they provide data to the industry or if they‚€ôd be willing to participate in both products. If CMRs use both products, then we know that the larger publishers probably would participate.

Find YP president is Phil Wojcik. Could this be the same Phil Wojcik that was the former Webmaster of the YPA?

John Kelsey <![CDATA[The Marshall Leaves Town]]> 2005-02-02T11:07:35-05:00 2005-02-02T11:07:35-05:00 2005-02-02T11:07:35-05:00
Pat has been actively involved in the earliest development of operator-assisted Yellow Pages, Internet service provision, and video on demand. But he is perhaps best known as the father of, the IYP/local search rabbit that everyone has been chasing since 1995.

As happens with most change agents, their days get numbered, and it comes time to move on. We'd expect Pat to show up as a major player in another market-leading organization. This Marshall understands the new frontier.

Neal Polachek <![CDATA[Chinese YP Market Gets Increasingly Competitive]]> 2005-02-02T11:03:24-05:00 2005-02-02T11:03:24-05:00 2005-02-02T11:03:24-05:00
The whole Yellow Pages market in China is estimated by China Unicom to be worth 4 billon yuan (US$480 million).

China Netcom plans to launch a new China Netcom Yellow Pages in 2005 to compete against "incumbent" publisher China Telecom. What is remarkable is that more Yellow Pages revenue is generated in Northern California than throughout China - with its 1.6 billion inhabitants. One cannot help but wonder what the migration path from print to online Yellow Pages will look like in China as industrial development continues at a rapid pace. Will the pace of industrial development be so fast that it is impossible for the print Yellow Pages model to stay ahead of the market or will online and wireless Yellow Pages be real pony to ride?