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SBC, BellSouth let their fingers do the walking

Companies are buying YellowPages.com and will expand it into a nationwide online business directory.

Tech Industry
SBC Communications and BellSouth will acquire YellowPages.com with the goal of making the site a better nationwide online business index, the companies said Thursday.

Based on the deal, the two companies said they plan to launch a joint venture between their respective directory affiliates that will aim to capitalize on the visibility of the Yellow Pages name and assemble a comprehensive online directory of U.S. businesses. The carriers said they hope to tap into the growing market for regional Web search.

Financial terms of the acquisition were not released. The companies said the deal could close as early as Thursday.

The acquisition underscores a transformation in the business directory market as traditional print yellow pages published by local carriers face a growing competition from rival publishers such as Yellow Book and online business and phone listings.

The two regional Bell operating companies already share deep ties as the co-owners of Cingular Wireless, which bought AT&T Wireless for $41 billion in October, creating the nation's largest mobile services carrier.

The carriers estimate that they can generate 50 million consumer Web searches per month through the new partnership.

"This venture will help us better meet the needs of today's growing pool of Internet users who are looking for easy, accurate local searches that will take them to the shoe store near their home, the hotel in the town to which they're traveling, the mover who'll take their household goods to a new city and the doctor they'll use when they get there," Dennis Payne, chief executive of SBC Directory Operations, said in a statement.

Another benefit the companies expect to garner via the expanded YellowPages.com business is increased national reach in the Internet directory and local search advertising market. Last week, BellSouth announced a multiyear partnership with Google to sell regional ads through the search giant's AdWords program. Based on the deal, Google plans to use BellSouth's sales force to reach small and medium-size businesses across a nine-state region in the Southeast.

BellSouth also has an existing local advertising business in RealPages.com, another Yellow Pages site. The company has said that Web surfers made nearly 160 million searches on RealPages.com last year alone. The companies said SBC Directory Operations and BellSouth Advertising and Publishing will continue to manage their local online yellow page relationships in their respective regions, outside the new venture, while the new effort will establish a sales force for national advertising accounts.

"To be a leader in online yellow pages, you need two things--traffic and strong local advertising relationships," Payne said. "This new venture gives us both--the strong consumer traffic from YellowPages.com, SBC's SMARTpages.com and BellSouth's RealPages.com sites, plus enhanced local advertising content provided by SBC Directory Operations and BellSouth Advertising and Publishing."

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