From the St. Petersburg Times . . .
Business: Yellow pages rivals to square off in New York court

Yellow pages rivals to square off in New York court Verizon claims Yellow Book has made misleading statements by claiming more people use its directory than Verizon's SuperPages in certain areas.

By LOUIS HAU, Times Staff Writer Published July 26, 2004

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They're big. They're yellow. And they always seem to have some personal-injury lawyer grinning at you on the back cover.

Nope, there doesn't appear to be much about a yellow pages directory that would get people all worked up. But phone directories are big business, with the industry racking up total revenue of about $14-billion in 2003.

A consulting firm even hosted a three-day yellow pages conference last week in Atlanta that was attended by more than 400 directory executives. Now, there's a pitched legal battle brewing between Verizon Communications' phone directory business and Yellow Book USA Inc., the nation's largest independent publisher of yellow pages directories. Both compete for advertisers in St. Petersburg and Tampa.

In a lawsuit scheduled to go to trial today in U.S. District Court in Brooklyn, N.Y., Verizon has sued Yellow Book for damages alleging that its competitor has made misleading claims in its marketing pitches and TV advertising. Verizon alleges that Yellow Book sales representatives and TV ads have been falsely claiming that more people use Yellow Book in a given area than Verizon's own SuperPages directory.

The phone company is seeking unspecified damages alleging false advertising, "commercial disparagement" and unfair competition. "Defendant's intentional misrepresentations harm advertisers in print yellow pages directories and also harm the public generally," Verizon says in its lawsuit.

Yellow Book counters that Verizon's allegations of false marketing practices were based on information obtained from disgruntled former Yellow Book employees. The company also claims that its TV ads have not misled viewers about the size of its business. "While Verizon strains to morph Yellow Book's humorous and plainly hyperbolic television commercials into . . . claims about the parties' respective market shares, it is the truth, not the falsity, of Yellow Book's success that is at the heart of Verizon's discomfort,"

Yellow Book says in its motion to dismiss Verizon's suit. The battle for customers has expanded rapidly since the U.S. Telecommunications Act of 1996 brought down the last barriers to market entry, according to Charles Laughlin, vice president and program director of the Kelsey Group, a Princeton, N.J., consulting firm.

With low fixed costs and a market that only recently saw the emergence of significant competition, large players can reap significant profits, he said. It just so happens that Verizon and Yellow Book are two of the most aggressive players in the market. Yellow Book has been an important catalyst for competition in the directory business, thanks to the formidable financial backing of the Yell Group, the leading publisher of phone directories in Britain, Laughlin said.

The Yell Group, a former subsidiary of British Telecom, acquired Yellow Book in 1999 for $665-million. Meanwhile, Verizon not only publishes directories within its own service territories, it is the only regional Bell company to branch out significantly into other Bell territories to compete as an independent directory.

 - Louis Hau can be reached at 813 226-3404 or hau@sptimes.com

Here's a very interesting article that appeared in AdAge about the success of advertisers using Internet Yellow Pages. Looks like it was written by Verizon's PR department, but at least it's positive on the industry.

Next step . . .pay per call.

ONLINE YELLOW PAGES BEAT SEARCH ENGINES LOCALLY

Both directory companies, Dex and Yellowbook have advantages over the other in their markets.

I recommend that advertisers use a mix of ads that give their company fair representation in both directories, even if that means splitting the budget.

Consumers will use whichever directory is in their hands without much thought. If a business is not represented in the directory that the shopper uses, the business loses, and that's not good business.

A mudslinging war like this is ultimately good for advertisers and shoppers, because competition makes us all work harder.

However, the REAL competition is the non-directional advertising vehicles that have much worse return on investment.


: "The Denver Post


Phone books rip each other with ad claims
By Tom McGhee
Denver Post Staff Writer

Sunday, July 04, 2004 -
Arapahoe County-based Dex Media and rival Yellow Book are bludgeoning each other with blunt advertising typically seen in political campaigns.
Dex billboards in the metro area show the Dex directory topped by the word 'official' and a much smaller Yellow Book directory with the word 'superficial.'
And in a local newspaper ad, Yellow Book, which entered the Denver market last year, accused Dex of counting directories twice in reporting a circulation of 2.7 million for the Denver region.
Dex denies the allegation.
It isn't the first time that Yellow Book, a division of United Kingdom-based Yell Group Plc, has riled a competitor. Last year, Dallas-based Verizon Information Services sued the company in New York, charging Yellow Book with making false advertising claims.
Yellow Book's rivals are showing their fear of competition, said Steve Topping, a Yellow Book regional vice president for sales in Denver. 'When you have two utilities that are losing market share, there is going to be a battle.'
The $14 billion phone directory market is brutally competitive, said Christopher Bacey, a spokesman for the Yellow Pages Integrated Media Association, a trade group. His organization has 200 members producing everything from directories that serve major population centers to niche publications aimed at ethnic communities.
The directory business was once the dominion of regional Bell companies that owned both a phone network and a directory service. Ten years ago, the Bells accounted for about 96 percent of yellow-pages revenue.
BellSouth, Verizon and SBC all continue to own directory businesses.
In 2000, Qwest acquired"

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