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A Big Market to Shrink

December 5, 2006

The highly publicised (proposed) sale of the Yellow Pages group has brought about the public disclosure of the groups financial figures which have been obfuscated in recent Telecom annual reports.

“Yellow Pages has annual Ebitda of $160 million. In the three months to September its revenue rose 11.3 per cent to $69m. Analysts’ estimate it could fetch between $1.6b and $2.2b.” – from Stuff

This reminded me of an article I read about an American service 1800-FREE411 (Kiwi translation 0800-FREE018) – free directory assistance paid for by listening to a 10 second relevant advertisement. By saving users on average $1.25 per call, that service has the potential to shrink a $8 Billion market.

I’ve heard from so many business owners over the years who grumble about their yp advertising costs and how all their business comes from referral or off the street – but they still pay up – “fear of loss is a greater motivator than desire for gain”.

I want Zenbu to shrink the yellow pages market in NZ. Performance based costs and advertisers who only pay for results.

The print directories still have a few years left in them yet, but they will become a massive burden on the owner in the twilight years. Online and mobile local search will feed our need for instant gratification as users. I’ll be amazed if a major search engine like Google or Yahoo coughs up 2 billion (analysts suggestion) for that business, if not for the fact that it is short change from the cash reserves of those big players.

Wait and see…

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