BizWeek reports that SBC and BellSouth have cut a deal for listings on AOL.
The battle over local Internet advertising pits some of America’s most powerful companies against each other over a highly lucrative business. Profit margins at Yellow Pages publishers are often higher than 50%, excluding interest, taxes and noncash charges.
There’s one hitch: The print Yellow Pages business is growing slowly — only about 1% to 2% a year, according to researchers at Kelsey. But the combined business of Internet Yellow Pages and local Web search is expected to grow 50% a year, from about $670 million last year to $5.1 billion in 2009.
(Thanks, Craig)
I have to say this deal confuses me a little bit… or a lot. I know that the search advertising space is very incestuous but this seems like a conflict of interest.
I believe, correct me if I am wrong, Google serves ads for both AOL and yellowpages.com Correct? And Bell South has a reseller agreement with Y!SM and Google. So where would this deal leave AOL other then serving more of Google’s ads? Is AOL going to build out its own PPC system? That would be interesting. There has to be more to this.
Maybe I just read it wrong but the article says it positions AOL to compete, I see it as just making them a more valuable partner for Google. Great for advertisers!
The YellowPages.com venture merged two powerhouse IYP services (RealPages.com and SmartPages.com) into a Content giant. Search providers gain significant traffic by utilizing the premier IYP YellowPages.com as their yellow pages. In turn YellowPages.com gains usage and direct revenue from being able to offer superior search products. This consolidation of power is ultimately in the best interest of the consumer. These partnerships provide deep, relative content to local search users. This is discussed more at YellowPagesBlog.INFO –