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Oct 10 2005
Are RBOC Yellow Pages the Big Game?

The Journal goes on to predict that Carlyle won't be the largest buy-out fund for long. At least three other companies "are expected to be as big or larger." Michael Klein, head of global banking at Citigroup said, "the capital is there, the financing is there and the kinds of companies willing to consider it are there." Buy-out companies don't make money sitting on a pile of cash. That's why the headline of the story is "Carlyle's $10 Billion Puts Private Equity in Hunt for Big Game." Every major private equity firm and bank have called on the RBOCs' CFOs and strategic planners to talk to them about the benefits of a sale. Here's the back of the envelope math. The three RBOCs generate roughly $1 billion-$2 billion each in EBITDA. Let's take Verizon, whose EBITDA last year was approximately $1.7 billion. At a multiple of 8, that means it would cost something over $13 billion. Not too long ago that would not have seemed like too big a deal. In fact, it would be the second largest private equity deal in history. However, Verizon sold its Canadian operations to the second highest bidder in order to get the deal done quickly. Similarly, they moved fast in selling their other international directory businesses. Even after capital gains, this would give Verizon a sizable chunk of money to pay back debt (particularly if they do the MCI deal) and/or invest in fast-growing wireless and DSL businesses. BellSouth and SBC have similar fast-growing businesses and joint ownership of, which is devoted to the fast-growing local search/IYP business. Carlyle and Goldman Sachs, among others, have had a taste of the money that can be made in the Yellow Pages business. It seems to me the stars are aligned.
Blog: Local Media Blog
posted by  John Kelsey at  15:29 | permalink | comments [1] | trackbacks [0]

Sep 19 2005
'I Agree with What He Said'
What do you get when you ask a YPA staff vice president to ask six board members questions in front of the membership? In short, not a lot of controversy. That's nobody's fault. It's just the environment. Stephanie Hobbs, who managed the best YPA conference in memory, had the difficult task of trying to pull interesting comments from a group of publishers who mostly looked like they were there only because they got the short end of the straw. YPG's Marc Tellier even bought an entire Yellow Pages company to avoid his scheduled participation.

Will there be consolidation in Internet Yellow Pages? SBC's Denny Payne says yes. Verizon's Kathy Harless agreed, but added, "but not the way you expect." I would have loved to have followed up that comment. To a question from the audience about what they are doing to reverse the revenue decline, Dave Swanson of RHD underscored the importance of building usage and getting people, "focused on the value we bring to the marketplace." Volt's Gerry DiPippo volunteered that independents do well in opening new markets. New BAPCO President Ike Harris said the industry needs to spend more money on advertising to tell the value story. He followed that up with the interesting comment that they are lookinig at the "revenue/margin" issue. George Burnett's voice was the most forceful in the group, and he had one of the best lines. "If you think the last five years were interesting, tape up your socks because the next five years will be wild."
Blog: Local Media Blog
posted by  John Kelsey at  10:05 | permalink | comments [0] | trackbacks [0]

Sep 19 2005
Verizon Traffic Reached All-Time High in December

From the February 10 Yppaelinc: " traffic rose to an all-time high in December as online holiday shopping helped increase search volume. The SuperPages network, which includes and other sites with which we have traffic and partnership agreements, received more than 16,238,000 unique visitors -- an increase of 31 percent from November. And, it's estimated that 9 percent of all active online users visited the SuperPages network during the month. The site also was the 30th most popular brand on the Internet and aided in making all Verizon Web sites (,, etc.) collectively the 13th most visited Web property during December. One other notable statistic: The Buying Power Index, which shows the relative purchasing behavior of site visitors, indicates SuperPages network visitors spend 112 percent more than the average Internet user."
Blog: Local Media Blog
posted by  John Kelsey at  10:05 | permalink | comments [1] | trackbacks [0]

Sep 15 2005
Would You Take Door No. 1 or Door No. 2?

So if you��re looking for a way to get people to write reviews about local businesses, what would you do? Insider Pages is offering a $10 Shell gas gift card to members when they review 10 local businesses. You are required to register, but if you follow their rules, such as each review being at least 50 words, you automatically win the free gas. Yahoo! takes a different approach. Every time a member writes a review, s/he gets entered into a contest to win a Mazda, a fancy trip or a Dell DJ. Which one of these approaches will be the more successful? Obviously it��s difficult to make a comparison because many more people are likely to see the Yahoo! offer than the Insider Pages offer. Insider Pages CEO Stu MacFarlane said, ��Gas prices aren��t the only things that are going through the roof.�� They claim to have 250,000 customer reviews. It seems to me that the people most likely to make the reviews are going to be younger, which is okay because they probably match the demographics of the people who would be using the reviews. To take a big picture view, business will be better at serving customers if they get feedback. And so over time, these reviews could actually enhance domestic productivity. If that sounds like a stretch, consider how much credence you would pay if a business had 10 reviews. It would get my attention. But people aren��t likely to take the time to provide a review if they don��t get some reinforcement. That��s why I like Insider Pages�� approach��I like the fact that I��m helping to populate and enhance the value of a Web site while getting $10 worth of gas.
Blog: Local Media Blog
posted by  John Kelsey at  16:45 | permalink | comments [4] | trackbacks [0]

Sep 11 2005
How Fast is the Digital Horse?

Recently, I have had the opportunity to speak to a number of publishers of all sizes to get a sense of their perspective on this important issue. My take is that Yellow Pages executives believe there will be a major movement over the next two years. Is this a case of irrational exuberance, especially when the competition is as technically savvy as Google, Yahoo!, Microsoft and AOL? For instance, YPA President Neg Norton reports that usage of the print product remains essentially flat for the first half of 2005 vs. the same period in 2004. Similarly, overall Yellow Pages revenues are up slightly, tracing to price-ups, strong independent growth and the success of companion directories. Reinforcing this is the fact that consumers find local products and services in whatever fashion is the easiest and quickest. As good as local search is, users have to be at a terminal and know how to find what they are looking for. For the most part, mobile phones and PDAs have not yet caught on. Importantly, advertisers are used to buying Yellow Pages ads, and they don't want to lose their position in a directory. For nearly 20 years, The Kelsey Group has been focused on the impact of new technologies on directories and other publishers. Without exception, every traditional media is facing unexpected challenges right now. Yellow Pages publishers are well positioned to continue to be the primary source of bringing local buyers and sellers together. Internet Yellow Pages and local search are improving weekly and are increasingly valuable tools. There is no question that they will begin to take advertiser dollars away from print, but don't look for this to happen overnight.
Blog: Local Media Blog
posted by  John Kelsey at  13:19 | permalink | comments [2] | trackbacks [0]

Sep 1 2005
Which Search Engine is the Best?
No such luck. This was simply a headline designed to suck readers into a brief news story. Oh, and by the way, why don��t you respond to the question, ��What do you think is the best search engine?��

For the record, at 10:30 am EST on Thursday around 8,600 votes had been cast and the clear winner among respondents is Google with 69 percent. Yahoo is the only other company in double figures with 16 percent. Voting was the only way I could see the results, but I felt a little silly doing it. I really felt like a sucker when a multi-media ad popped up for Fisher Investments. Marketing is my background so Forbes gets a few points for getting me to play their game. However my business is analysis and both the headline and the results are deceptive. Asking which search engine is the best is a little bit like polling people about the best college. The results are meaningless. What concerns me is that Forbes is likely to publish the raw data without any analysis. That does a disservice to the search engine business and the media industry.
Blog: Local Media Blog
posted by  John Kelsey at  11:48 | permalink | comments [1] | trackbacks [0]

Aug 29 2005
AIDA: Old Media Still Works!

Specifically, DCCI is focusing on ��the ROI data our Call Measurement Services provides to marketer and business owners,�� and how their ��Call Measurement Programs deliver real-time information about high-value customers.�� They have placed the ads next to a YPA print ad with a headline, ��Guess Who Leads the Way in ROI?�� And so the two ad campaigns reinforce each other. I��m not in a position to judge whether these ads will be successful in introducing their new ��Telmetrics, powered by DCCI�� branding, but the direct-mail piece succeeded in increasing my Desire to know more and at least sufficient Action that I wrote this blog. Most of our company��s marketing is electronic (as you all probably are very well aware), but the part of the Yellow Pages business that still generates 90% of industry revenues lands on our front doorstep and gets put in the kitchen drawer �� the heart of the information center of most homes.
Blog: Local Media Blog
posted by  John Kelsey at  10:12 | permalink | comments [0] | trackbacks [0]

Aug 19 2005
Industry Excellence

Truth be told, I don't much enjoy watching awards ceremonies, which can be mind-numbingly dull if not done well. The YPA hired entertainer Roy Firestone, who did his best to liven up the evening. He was fine (although his show didn't change much from last year), but no one can make the reading of what every gold, silver and bronze winner has done sound interesting. I would very much like to see the YPA provide some extra publicity for the community service awards because these are projects that really show how the Yellow Pages industry is helping their communities. The gold award was won by Sutter for " 'An Opportunity for the Future' The Sutter Vocational Grant Training Program." The silver was won by the DAC Group and Ketchum got the bronze. All three of these - and I'm sure many more who didn't receive awards - helped show the power of Yellow Pages (the theme of the conference). There were two other significant awards. Incoming YPA Chairman Dennis Payne created the Individual Achievement Award and gave it to Stu Stanze who died seven months ago. No one listening to Denny's warm recitation of Stu's accomplishments, nor his wife Carol's acceptance speech, was unmoved. The Lifetime Achievement Award was given to Elmer Smith. The presenters were John Berry, grandson of Loren Berry one of the people who along with Reuben Donnelley changed the shape of the Yellow Pages forever, and Ike Harris, the new head of BAPCO. Yes, awards are a meaningful gesture and some, like those described above, should be done with appropriate fanfare. So let's keep the awards and do something about the ceremonies.
Blog: Local Media Blog
posted by  John Kelsey at  07:47 | permalink | comments [2] | trackbacks [0]

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