Local Search Threatens the Yellow Pages

[Garrett]

Alan Meckler, Chairman and CEO of Jupiter Media and creator of Internet.com, spoke at the Search Engine Strategies conference in New York this week.

Through the years Meckler has acquired over 250 companies and websites. He has lots of smaller information vehicles in a network of larger websites.

During the “Swimming with the Sharks: VCs and Investment Bankers” session, Meckler said search has only reached the first base of what it could potentially become.

There remain many vertical opportunities that could be worth millions for small companies.

He says search is one of the few surviving vertical slices of the Internet boom of the 1990s. During the boom, he said young business owners "forgot to remember that money is the most important product."

He also mentioned the threat of local search to the Yellow Pages. The Yellow Pages are a household word but now local search is becoming a growing threat
to publishers as more and more people find phone numbers online.

When asked how to determine whether to seek venture capital or just grow a business organically, Meckler replied that business owners must consider someone looking over their shoulders. Accepting venture capital means that they would give up abosolute control.

[WebMetro]

It's only a matter of time before everyone starts capitalizing on the Geo-Targeting you get from Google. Once Overture starts moving on this, it will be a full-blown must have marketing strategy.

[minstrel]

He also mentioned the threat of local search to the Yellow Pages. The Yellow Pages are a household word but now local search is becoming a growing threat to publishers as more and more people find phone numbers online.

I find this confusing but maybe it's a geogrpahical thing:

Here in Canada, the text version of the Yellow Pages (and also the White Pages) has been duplicated and enhanced as an online version for I think about 5 years now. In a metropolitan area, it is a lot more convenient to use because one does not have to have 4 (in Ottawa) or more Yellow Pages directories on hand to be able to search all regions of the city. In the text version, both advertisers and Yellow Pages themselves have links all over to websites and to the online version.

So I'd say that Meckler is correct: more and more people are locating phone numbers on the web and fewer are bothering with printed phone books.

But at least here in Canada, the revenue is going to the same people (Bell) so I don't see any "threat"...

[Mel]

I recently had the opportuity to discuss this at a Marketing conference with the business manager of the Singapore Yellow Pages, who have both online and offline (printed) editions.

His take on the matter was that it is threatening the printed version very much. The printed version is more costly to produce and which used to generate excellent income, but there is now less demand for the printed listings due to the availability of the same information online cheaper and with more convenience.

In this case the online edition has free listings for all businesses with only enhanced listings being sold.

[OneMoreBite]

I hope the online versions can create some competition for the yellow page listings because at present the monthly amount they charge for a small display ad is ridiculous. They've been robbing shops for decades - now is the time to get serious.

I know businesses spending thousands of dollars for monthly yellow page ads, yet they balk at the idea of spending a few hundred a month for Internet ads. I'm doing what I can to educate, but I expect until the online yellow page ads start to charge the same amount for ads, businesses may not perceive the value? Dumb, but true.

On another note, I don't usually go directly to a listing site such as a yellow pages site. Instead I still try searching for a business first. If I can't find them, then I'll resort to the phone listings. I find nearly all the businesses I frequent online now. Dentists, doctors, all professionals. My personal feeling is that if a business isn't at least visible on the net, then they are asleep at the wheel.

Kathryn

[minstrel]

... the Singapore Yellow Pages, who have both online and offline (printed) editions. His take on the matter was that it is threatening the printed version very much. The printed version is more costly to produce and which used to generate excellent income, but there is now less demand for the printed listings due to the availability of the same information online cheaper and with more convenience.

That was my point - but in Singapore as in Canada there is no real "threat": the same people produce both the print version and the online version, and they are in fact promoting the online version because their cost-to-revenue ratio is a lot better for the online version.

I hope the online versions can create some competition for the yellow page listings because at present the monthly amount they charge for a small display ad is ridiculous.

I agree the costs are outrageous but the way it works here so far you have to pay that exhorbitant fee for an ad in the print version in order to have a listing in the online version, so you save nothing and Yellow Pages makes more money. They also have, for extra fees, "enhanced listings" which put your business name, alphabetized, among others who have paid extra at the top of the listings. Can you say, "we've got you by the neck and you WILL pay"?

On another note, I don't usually go directly to a listing site such as a yellow pages site. Instead I still try searching for a business first. If I can't find them, then I'll resort to the phone listings. I find nearly all the businesses I frequent online now. Dentists, doctors, all professionals. My personal feeling is that if a business isn't at least visible on the net, then they are asleep at the wheel.

Agreed but in my case for a phone number I go to YellowPages.ca (which includes personal "white pages" phone numbers); for directions I go to MapQuest; for travel bookings, I usually hit Expedia; and for everything else my first stop is Google.

[Mel]

Sorry Minstrel you must have overlooked the last line in my post:

In this case the online edition has free listings for all businesses with only enhanced listings being sold.

So in Singpore they consider the threat real (at least according to their business manager, YMMV) since the provision of free listings has reduced the sales of paid ads in the the printed edition which previously was a big money spinner.

Now you may not condsider this a theat, but the business manager of the Yellow pages did consider a 50% drop in revenue as threatening. YMMV

[minstrel]

Sorry Minstrel you must have overlooked the last line in my post:

In this case the online edition has free listings for all businesses with only enhanced listings being sold.

Well, I'm certainly not going to try to comment on what happens in Singapore - I've never even set foot in that city.

However, the web listings are also "free" in Canada, provided that you first have a paid listing in the print version. In other words, you pay Yellow Pages either way - if you want the enhanced listing you pay on top of the basic Yellow Pages fee.

I assumed, perhaps incorrectly, that this is also how it works in Singapore, in which case the Yellow Pages company gets your money either way. If listings in Singapore indeed are free and do NOT require the paid listing in the print version, that's a different - and my guess would be temporary - situation. SInce the same compnay operates both, I can't see them doing it as a free public service for long - they are going to make money from it one way or another or they'll withdraw the service.

[OneMoreBite]

It appears the Yellow Pages have pretty much got folks locked in, at least in the U.S., by requiring an ad in the book before you can be listed online. Meanwhile in the online world there's competition, and some other directory might just take the lead - leaving the Yellow Pages' business model in the dust.

Obviously if they didn't do this (requiring a book ad before Internet ad) their book's days would be numbered. They can't be so stupid that they don't realize this. My guess is they'll just start charging ridiculous fees for businesses to be listed, and that will be that. Unless someone else is able to provide the same for less, that is.

Kathryn

[Mel]

Sorry Minstrel you must have overlooked the last line in my post:

In this case the online edition has free listings for all businesses with only enhanced listings being sold.

Well, I'm certainly not going to try to comment on what happens in Singapore - I've never even set foot in that city.

However, the web listings are also "free" in Canada, provided that you first have a paid listing in the print version. In other words, you pay Yellow Pages either way - if you want the enhanced listing you pay on top of the basic Yellow Pages fee.

I assumed, perhaps incorrectly, that this is also how it works in Singapore, in which case the Yellow Pages company gets your money either way. If listings in Singapore indeed are free and do NOT require the paid listing in the print version, that's a different - and my guess would be temporary - situation. SInce the same compnay operates both, I can't see them doing it as a free public service for long - they are going to make money from it one way or another or they'll withdraw the service.

It looks to me that this situation may indeed continue for some time, as Singtel intend to continue the distribution of the printed Yellow pages (in which every business listing gets a regular listing) and the online pages. The online pages are prepared from the same database as the printed version, so the cost is minimal and sales of enhanced listings almost pure profit.
But as more and more people use the electronic Yellow pages it becomes harder to sell the printed ads which were previously the main profit center.

Technolgy changes and business has to match the change to survive. This may mean that older business models will have to be rethought and may result in situations such as the title of this thread highlight.