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SBC and BellSouth Partner, Acquire www.YellowPages.com
A giant move in Local Search

 5:22 pm on Nov 4, 2004 (gmt 0)


SBC Communications Inc. (NYSE:SBC) and BellSouth Corp. (NYSE:BLS) today announced that their directory affiliates have created an Internet yellow pages joint venture that has entered into a definitive agreement to acquire the online directory publisher www.yellowpages.com, Inc. The deal is expected to close as early as today. The new venture will utilize the highly recognized YellowPages.com brand and expects to become the market leader in Internet yellow pages and local Internet search.

Another article about this from ZDnet, with more information



 5:34 pm on Nov 4, 2004 (gmt 0)

SBC and BS have a history of working with each other; together, they run Cingular, one of the largest US cellular networks.

I wonder how that will play into this.


 5:51 pm on Nov 4, 2004 (gmt 0)

interesting... who's the 'leader' right now? verizon superpages?


 6:14 pm on Nov 4, 2004 (gmt 0)

:-) :-) :-) All very predictable. Hoping other predictions come true. Now, back to work, there's bills to pay!


 7:23 pm on Nov 4, 2004 (gmt 0)

Large communications companies aren't exactly KNOWN for their spontaneity are they? :)

I wonder how that will play into this.

Maybe with BOTH companies someone will figure out the value of static links and anchor text.

[edited by: stuntdubl at 7:26 pm (utc) on Nov. 4, 2004]


 7:23 pm on Nov 4, 2004 (gmt 0)

I dont think there is/will be a big local search traffic beyond big 3 SE's...The only way for the Regional Bells to garner this fast growing market is to partner with Google/yahoo

People are/will be used to a single place to search for everything from the local dentist to the vacation in south africa! .


 7:34 pm on Nov 4, 2004 (gmt 0)

Guesses regarding the portion of YP look-ups done in print vs. on-line?


 7:42 pm on Nov 4, 2004 (gmt 0)

Gopi, at the local level, I respectfully disagree. I think local is a very different animal and Google would have done well to buy YellowPages.com. I was waiting to see that happen. Shortsighted IMHO. Algos aren't necessarily the answer for everything. Database marketing also works. Maybe they'll buy another player.


 8:40 pm on Nov 4, 2004 (gmt 0)

I am not sure Webwork .Even many of this online yellow pages (eg: swithcboard.com) get majority of their traffic from the SE's itself .

Lets see , everything will be clear in 2-3 years :)


 9:29 pm on Nov 4, 2004 (gmt 0)

Everything will be more consolidated in 3 years ;-)

Hope springs eternal.


 4:09 pm on Nov 5, 2004 (gmt 0)

I am at the Kelsey conference where this was announced yesterday afternoon.

The aquisition and formation of the new company is based on trying to get a hold of the local search biz. Both companies said yesterday that the Yahoo! and Google local search had no bearing on their decision but that they had been speaking for the past year and YellowPages.com made intimations that they were willing to be aquired. They refused to announce figures but it seems as though someone at the WSJ is saying it was around $100m

They are just starting to get the new company together next week and have not ruled out any further partnerships.


 4:09 am on Nov 6, 2004 (gmt 0)

If the 100M is even close to the right number, it will be the largest price ever paid for a domain. There is no technology or real traffic to speak of, so the real value is the domain.



 7:02 am on Nov 6, 2004 (gmt 0)

Well, SBC is SBC/Yahoo DSL so they've got demographics down to our underwear sizes, not to mention complete stats as to subscriber surfing habits, as all ISPs do.

Notice when you sign in for a Yahoo ID they ask for your zip code. And when you call about your SBC phone service, given half a chance they try to set you up with Cingular with almost irresistable package deals.

SBC/Yahoo is just about turning into Microsoft. Looks like they'll by anything or make an acquisition of anything that can't run away on its own two feet.

Don't know thousands of what, I didn't read the article that came through; but their phone customer support is oursourced offshore, and has been for quite a while.


 12:37 pm on Nov 6, 2004 (gmt 0)

"If the 100M is even close to the right number, it will be the largest price ever paid for a domain. There is no technology or real traffic to speak of, so the real value is the domain. "

I have to agree. Their data is not that great. Not sure what they have that is worth all that money.


 1:39 pm on Nov 6, 2004 (gmt 0)

If the 100M is even close to the right number, it will be the largest price ever paid for a domain.

At Kelsey there were people saying this all the time with a smile.

SBC is laying off workers by the thousands.

Not sure what kind of workers they are laying off. One thing that the YP have is a sales force knocking on doors every day. With the combination of those sales forces - (if I remember it right I think it is about 30,000) technology aquisition of an enterprise search platform to get content for their advertisers, and partnerships with other local content and partnerships with the Yahoos and Googles (Who both had their Local Search leaders at the conference and said that they were willing to make content partnerships) they could build a bit of a powerhouse in the busines to consumer search space.

The combination of their structured data with unstructered data from the internet it is a very viable business plan going forward if they do it right.

They seem happy with the revenue share they have worked out for the internet part of business they do but it is early days.

Their customers (the advertisers) seem happy to pay the YP people a monthly fee. They see it as a cost of doing business. I personally can't remember the last time I used the Yellow Pages. Verizon just did the YP drop in my building a week ago and their are piles of them not moving from the mailbox area.

At the same confernce earlier this year in Santa Clara the YPs were talking about selling "buckets of clicks" to their advertisers. This seems to have faded into the background now. I am not exactly sure if my local dry cleaner has a web site. I know he comes to my building every morning to pick up the dry cleaning from the concierge, he brings it back the next evening. The only time I contact him if one of my shirts are missing and that has happened once in the last 8 years. I wouldn't dream of looking him up on the internet.

I am not sure about the future of YPs - but having a sales force on the street, with a current relationship, is something Google and Yahoo would love but be impossible.


 1:45 pm on Nov 6, 2004 (gmt 0)

Just found the following article teaser which I don't want to pay for:

NEW YORK (AdAge.com) -- Most regular online shoppers have experienced the moment of frustration when they've found every conceivable detail about the item they want to buy -- except the name and number of a local retailer.

For those interested it is only 3 AdAge paypoints:


 3:28 pm on Nov 6, 2004 (gmt 0)

eurotrash, i wasn't expecting to find you on WW. a pleasant surprise. along with bakedjake and nyehouse (and others), a nice mix of local knowledge.

Sukhinder (the brilliant mind behind Google Local)called the yellowpages.com URL a red herring.This is about the combined salesforce and market posturing in the face of a changing local search landscape.

Bell south's recent partnership with Google marks the first such reseller agreement of its kind for Google. Yet, it will not be the last, as Sukhinder also pointed out the YPs are in a special position in the local search arena due to their sales proximity to SME (namely 600K paying advertisers -in the case of bell south alone). Google's mouth is watering.

Another important note is that Smart and Real are regionalized entities. YellowPages.com is national brand. And when you are bound by unionized sales forces in your regions and the lack of consumer adoption of your iyps outside of your traditional footprints, it only makes sense to hedge your bets with a brand that is not bound by geography. Finally, what this deal also represents is a sharing of advertisers on the smart and real properties. Amongst the majors, it is much easier to share advertisers and revenues and provide a better user experience with more comprehensive results sets, than it is to go at it alone.

Now that Bell South sells Google, i presume Smart will sell Google too, and what about the 100+ YellowPages.com sales reps? Is Google the secret winner here?

Being a reseller of Yellow and Smart, and being in negotiations with Real, we are watching closely to see how these cards fall.


 4:15 pm on Nov 6, 2004 (gmt 0)

Folks, this thread is about the acquisition of yellowpages.com. It is not about:

The 1984 AT&T breakup
Anti-trust laws
SBC's hiring/firing practices

Let's keep this on topic. Thanks.


 8:04 pm on Nov 6, 2004 (gmt 0)

The incumbent local exchange companies (SBC, BellSouth, Sprint, Verizon) generate enormous earnings from their yellow page directories. None of these firms has done much with their online yellow pages.

One of the problems may be the classic dilemma of a quasi-monopolist: new technologies often threaten their existing revenue sources. This is why these firms were slow to rollout DSL, and continue to be slow in cutting DSL prices.

If they are smart, they will move very aggressively (e.g. giving online ad space away to their print advertisers) to offer local search and directory services. To date, there is no sign they are capable of competing effectively with Google, et. al. Joining forces isn't going to make a difference unless they get smarter with their core strategy and improve their technology.


 9:56 pm on Nov 6, 2004 (gmt 0)

"YellowPages.com" works well in other media: As an image on a tv screen, on radio (voice of James Earl Jones?), on billboards, etc. Bell can walk this 'brand' into a national media campaign promoting local listings nationally, allow the print salesforce to sell online ads as 'an extra, not an exclusive', cut deals with YP advertisers outside their region and acquire a huge swath of mind share for a relatively small price. The YP needed a survival plan for the online era. This is their best move to date.

If you wish to defeat the evil YP empire you must learn to use the force, young jedi Webwork, use the force....


 11:41 pm on Nov 6, 2004 (gmt 0)

Many thought BellSouth would buy Switchboard before InfoSpace took them out for 130 million last spring. They made a great buy with Yellowpages if they only paid 100 million.
It's all about local.


 1:38 pm on Nov 20, 2004 (gmt 0)

An article in this morning's Atlanta Journal-Constitution provides some insight into BellSouth's direction with yellow pages and online advertising [ajc.com].

In summary, Bellsouth SBC will fold their online directories into YellowPages.com in the next 18 months. They will continue to market to local businesses with their sales force, and will purchase PPC to direct web visitors to their site.

The article also states that many SMEs are reluctant at this point to embrace online advertising/marketing.

PS: You may have to register to read the article.

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