Local Search and Yellow Pages (2/2) August 24, 2006Posted by NoWires in Local search, Technology, Web.
Are Yellow Pages a dying breed?
A lot of companies are doing the bidding. Besides search engines like Google and Yahoo that are offering local services with maps, coupons and other features, many startups are aiming at that space as well. Websites such as InsidePages and Judy’s Book are creatinglisting services with social networking features that let consumers create feedbacks. They emphysize the “word-of-mouth” aspect of finding services.
My previous post looked at the current numbers for online and YP accesses. However, the very fact that Yellow Pages are everywhere indicates from a distribution perspective YPs have reached saturation – there is no untapped markets left for them to deliver their product. The only hope of growth is to get more businesses listed in the yellow books and having them placing bigger ad. There they run into their second problem: the yellow book has physical limitations. Any yellow page that is over a couple of inches thick is just not very practical to use.
On the other hand, online services don’t have these issues. One estimate that about 50% of Internet users uses it to look for local services so apparently there area lot of head room. Being online eliminates the size problem altogether. Another advantage of online services are the ability to search – it can be a lot more efficient than browsing if it is done right.
Before you rush out and throw away your Yellow Page book, let’s not forget YPs still have a number of tricks in their bags to fend for themselves. The local ad market is very hard to penetrate. Being the incumbent YPs have an established sales network that gives them the edge. One might argue that this increases the transaction costs and takes away their scalability. That might be true, but one must have penetration before having scalability, especially for newcomers.
Another factor no one should overlook is this: Yellow Pages are closely associated with telephones. You look in Yellow Pages when you want to call somebody. And phone calls are a lot more valuable to merchants than web-clicks. That’s because phone calls typically happens late in the purchasing process, and they give businesses a better chance at closing the deal. Some estimates put the conversion rate of phone calls order of magnitude higher than mouse clicks. That’s why we started seeing online services like Google and AOL begin to experiment with “click-to-call” services.
Promising as online services are, whoever wants to compete with Yellow Pages and create an alternative for finding local businesses will have to find ways to overcome these obstacles.
Did I mention getting rid of print Yellow Pages saves trees?