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BellSouth searches for new ad sales

The major telephone and Internet service provider forms a search engine marketing service in an attempt to capitalize on the popularity of paid search.

Stefanie Olsen Staff writer, CNET News
Stefanie Olsen covers technology and science.
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Stefanie Olsen
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BellSouth, a major telephone and Internet service provider in the South, has formed a search engine marketing service in an attempt to capitalize on the popularity of paid search.

The Baby Bell said Monday that it launched Real Search Engine Solutions, a program designed to help local advertisers get listed in search engines and directories, as well as within its own online yellow pages, RealPages.com. The company has partnered with beleaguered search provider LookSmart to manage the service for regional advertisers. Terms of the LookSmart agreement were not disclosed.

"There are a lot of search engines out there and it can be a tedious process for companies to get listed in their databases," said David Rogers, a BellSouth spokesman. "We will coordinate with the various search engines to make sure they're aware of our advertisers' Web sites."

"This is a value-added service for our advertisers, and will give us more of a competitive edge over other online yellow pages providers," Rogers said.

With its new service, BellSouth plans to take advantage of a booming sector of the online ad business: paid search. Search providers such as Google and Overture let advertisers bid for placement atop or next to search results related to keywords. Advertisers pay only when Web surfers click on their ads. New research from the Interactive Advertising Bureau (IAB) shows that ads linked to keyword searches made up about 30 percent of the $1.66 billion in total online ad sales for the second quarter 2003.

BellSouth may be the first phone carrier or ISP to enter the local Web search market in the role of advertising consultant. The company not only offers regional businesses a way to get listed in its online yellow pages (through its subsidiary Intelligent Media Ventures, which runs RealPages.com), but also it will act as their ambassador to major search engines such as Google and Yahoo. This could put BellSouth in an attractive position as Google and Yahoo develop local search services of their own and look for local businesses to buy into their systems.

The deal also may be the first sign of LookSmart's new business strategy in the fallout of losing MSN, its biggest customer for paid directory listings. Microsoft's Web portal MSN recently said it would sever ties to LookSmart in the new year as it cultivates an in-house technology solution for Web search. LookSmart's share price and financial outlook fell dramatically on the news, casting the company's future in doubt.

BellSouth's Rogers said that it is selling yellow pages advertisers a bundled solution to get listed across a network of search engines, including LookSmart's partner distribution network.

Rogers said that RealPages.com's audience has grown dramatically in the past year. In 2002, it fielded 111 million searches for Southeastern businesses, and this year it has answered more than 160 million.