Hoping to tap deeper into the US$11 billion Yellow Pages industry, four Baby Bells are banding together to create a co-branded Web site and a $1 million marketing campaign to drive more traffic to their regional Yellow Pages sites. But consultants say the common page may be just the beginning of stronger partnerships between the publishing arms of the telcos.
The new "original Yellow Pages" site is simply a map of the US, where users can click on any state and be linked to the appropriate online directory, as published by Ameritech, BellSouth, Pacific Bell, or US West. The jointly published frontispiece carries no advertising, but the individual companies expect the page to increase their revenues by pushing more traffic to their individual sites.
"In order to draw traffic you have to advertise on high-profile sites," said US West spokesman Jon Lentz. So the group put up its first big ad on Yahoo on Wednesday - but you would have to go right past the "yellow pages" link on the Yahoo front page and do a search on "directory" to get to it. And so far, there seems to be no "name," so to speak, for the site.
The obvious URL had already been snapped up by Ronald Oister, president of the Jackson, Mississippi-based site www.yellowpages.com. He plans to launch his own online directory within the next week or so.
"We have received queries from every regional Bell operating company, from independent sources, venture capitalists, strategic partners, all wishing to purchase or grab a piece of the action based on the name 'yellow pages,'" Oister said. Like the rest of the crowd, he recognizes the name's potential to generate traffic, but argues that it's the value of his 15 million-name service that will really put him on top.
Oister will have some pretty stiff competition from the likes of Nynex's Big Yellow and GTE's SuperPages. Both telcos expanded their regional print directories to give their online services national coverage. By joining together under their "original Yellow Pages" banner, the four Baby Bells will avoid duplicating such an effort - while upping the ante for advertising dollars.
The printed Yellow Pages that arrive, unbidden, at your door each year, bring in more than $11 billion in annual advertising revenue, according to the Kensey Group, a consulting firm specializing in the interactive directory market. The upstart Internet versions pulled in a comparatively puny $7 million last year, but Kensey forecasts the figure to rise to $40 million by year's end and $300 million by 2000.
"What you see today is a great starting place," said Jeff Tarr, general manager of the US West Dex Internet Yellow Pages, admitting that to date the RBOCs have reached no agreement to facilitate advertising across all of their sites. "We're pursuing all sorts of ideas to benefit our users, advertisers, and shareholders," he added, but declined to disclose any details.
However, consultant Jim D'Arcangelo painted a slightly more aggressive picture. "In terms of an endgame, if they don't offer joint ad buys or something like that, there aren't really any benefits to it," he said. "This group of four ... will undoubtedly move into common management, infrastructure, an internal search engine, and a networked ad buy in the coming months," D'Arcangelo wrote separately in an analysis posted on the Kelsey Group Web site.
Greater joint action poses the question of just how far they can go without violating anti-trust laws or Justice Department rulings designed to keep their businesses separate. But US West's Tarr brushes off the notion that the Baby Bells are ganging up by saying: "I wouldn't read any more into this than the co-branding agreement for our products."
