Monday, November 15, 2004

Article on Yellow Pages and Local Search from WSJ

I received this today in "Cool News" which is a quick email snippet of great information. This article appeared in the WSJ.

Yellow Web Pages. It would appear that search engines and Yellow Pages publishers might be headed for a pitched battle for the ad dollars of local retailers, but in fact they are forming alliances, reports Kevin J. Delaney in The Wall Street Journal. The potential for conflict is evident in the numbers. Some $22 billion was spent on local advertising in the U.S. last year, according to Morgan Stanley, and about half was claimed by Yellow Pages publishers. Search-related local ads "accounted for only $700 million of the total," but of course Google,, Yahoo,, and Ask Jeeves, -- big engines all -- are actively pushing local search engines that could take ever-bigger bites out of the Yellow Pages.

In fact, The Kelsey Group,, a Yellow Pages consulting firm, projects that by 2008, "local search-related advertising in the U.S. will total $2.5 billion." This online-offline skirmish is underscored by the apparent advantages of the search engines over phone books: "For instance, instead of wading through the restaurant listings in a phone book, you might have a better chance of finding what you're looking for by searching for 'romantic Italian restaurant' in your area on a local search site." Why, you'd be able to pull up "a list of restaurants, with addresses and phone numbers, accompanied by ratings ... a photo and a map, a brief description of the restaurant, a price range and hours of operation." The allure would likely only increase as cellphones enable on-the-fly access to such information. Says Matthew Berk, founder of, a local search start-up: "There's oodles of content that's locally relevant, it's just a matter of making sense of it all."

That's exactly where the Yellow Pages publishers,, come in. While they can't easily match the sophistication of a Google, Yahoo or Jeeves online, they do have something the dot-coms don't have -- sales organizations. "We've got close to 2,000 sales people contacting 2.5 million businesses in just our nine states," says Elmer Smith of BellSouth Advertising and Publishing, adding, "That's pretty expensive to replicate ... We consider every one of the eight or ten major search engines our partner," he says. Equally key to this opportunity is "the fragmentation of the market," making it difficult for local merchants to figure out where it makes most sense to advertise. That, says Ken Cassar of Nielsen/NetRatings, is "ground combat," and a no-tech challenge. In the meantime, Yellow Pages continues to dominate local search, and that's not likely to change anytime soon, as even Sukhinder Singh, Google's general manager of local search admits: "Users will continue to use multiple delivery options for a long while."


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