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Sep 2 2005
RHD Sees the Light on Cover Ads
We noted with interest on RHD's latest earnings call that it has removed cover ads from its SBC-branded directories in Illinois, the logic being that cover ads make it harder for the publisher to distinguish its brand from its competitors. We think this is a smart decision, and one others should take heed of.

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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  00:51 | permalink | comments [0] | trackbacks [0]

Sep 1 2005
Yellow Pages Scams Alive and Well
About a decade ago, I wrote a lengthy article for Link magazine (anyone remember Link magazine?) about the efforts of the U.S. Postal Service and others to crack down on bogus Yellow Pages scams, which exploit the inattention of busy small-business people to sell them advertising in worthless directories and then aggressively collect the debts. These schemes appear to be alive and well.

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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  23:56 | permalink | comments [0] | trackbacks [0]

Sep 1 2005
YPC Goes with SBC Agency
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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  10:08 | permalink | comments [2] | trackbacks [0]

Sep 1 2005
BellSouth Announces It Has Hit 20M Monthly Searches
BellSouth put out a press release today quoting BAPCO CEO Ike Harris announcing that the company's IYP site has reached 20 million monthly searches. The press release also claims that search traffic has grown by 18 percent from 2004 to 2005.

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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  10:07 | permalink | comments [0] | trackbacks [0]

Aug 25 2005
Verizon to Buy MCI for US$6.6 Billion
In case you haven��t noticed, another round of consolidation in the U.S. telecom space is well underway. In one sense, it means less this time around to the directory business than it did the last. When SBC buys AT&T, or when Verizon buys MCI, there are no directory organizations to bolt together �� one party has a publishing business and the other doesn��t.

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 ��non-core�� assets as sources of cash. We believe SBC has resisted this temptation because it loves the cash flow of directories and hasn��t 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.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  08:18 | permalink | comments [3] | trackbacks [0]

Aug 9 2005
Choice Comments from YPA Las Vegas
It was a full day here in Las Vegas �� the land of free drinks that can cost you every penny you have, and where the hotels invest very little in clocks and windows.

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 �� 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 ��her world�� 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.

��How many years before there are computers in the kitchen?�� 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��s Adam Shepherd said that based on the numbers, the odds of another large U.S. telco selling its directory unit are about ��50/50.�� 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��s from New Jersey) calls China the ��last frontier�� 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, ��Growth in product usage is the number one metric that we focus on.��

From the Presidents�� Panel:

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

Burnett��s answer was that ��There is no doubt that Yellow Book is our biggest and toughest competitor.�� 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, ��Are the independent publishers competing fairly?��

Her answer: ��Most independents do. The record stands for those who don��t.��

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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  09:36 | permalink | comments [0] | trackbacks [0]

Aug 1 2005
Aptas, ISX, YPsolutions Form Local Matters
Three technology firms serving different segments of the online directory and local search space have merged in the interest of broadening their collective base of customers and extending the range of services offered. Aptas, recognized for its work in extracting and organizing Yellow Pages ad content into a searchable database, has gotten together with YPsolutions, which offers both look and feel online publishing and a standard search-based IYP platform, and ISX, which enables data for delivery in a voice and wireless environment. The new firm, called Local Matters, made the rounds of recent industry conferences to "soft launch" the new technology brand.

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.

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  10:36 | permalink | comments [0] | trackbacks [0]

Jul 29 2005
UK Regulator Seeks Investigation into Directories Market
Britain��s Office of Fair Trading issued a statement on April 5 that it would request that the nation��s Competition Commission begin an investigation into the UK classified directories market. The OFT made the recommendation based on its conclusion that the competition that has emerged recently in the UK directories market has not produced results that satisfy the agency.

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��s 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.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  19:27 | permalink | comments [2] | trackbacks [0]

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