BigBook site on the block
BigBook is planning to sell off its popular Internet yellow pages directory and focus on online marketing.
The privately held company is in talks with a handful of companies to sell its Web site--its mainstay business for three years--and could have a buyer by the end of the month, according to Hobbs. He declined to name them. BigBook also will round out its management ranks by naming a new CEO on Monday, he added.
"This is an effort to reduce our costs and bring in cash," Hobbs said. Like many Net start-ups, the company is unprofitable. But it has sufficient cash reserves from venture capital funding and expects to turn a profit by 1999, he noted.
Hobbs was hired as interim CEO when he came on board last September. In recent months, the company has named a new vice president of technology and a vice president of marketing.
BigBook faces stiff competition from the likes of Big Yellow, Switchboard, WhoWhere, and the Baby Bells, which run their own online yellow pages. The Baby Bells' plans to muscle into the market drew an antitrust lawsuit from Switchboard last year. (See related story) The telcos deny the suit's charges.
In addition, Internet yellow page directories now must compete for ads with giant search directories such as Yahoo and Excite, which offer online yellow pages as just one of many features. After exiting the directory business, BigBook will focus on providing small businesses and small offices-home offices (or SOHO) with the tools to run the online side of the business. The company also will provide Internet access, Web hosting, and sell network computers or Net phones to link its customers to the Net--essentially serving as a one-stop shop.
Hobbs said holding onto the directory site is a conflict of interest with its marketing business, because BigBook.com becomes a competitor for traffic: "It is like an ad agency owning a newspaper. No one would want to do business with us."
He added BigBook still would like to strike a partnership with the buyer of its Web business to help drive traffic to its site.
Most of Hobbs's efforts have been focused on BigBook's networking business rather than its yellow pages directory since he joined the company in September. "The ad traffic is all but gone," he said. "We have not focused on it for the past six months.
"The majority of our revenue is coming from the growing networking business. It has been growing 25 to 40 percent a month."
BigBook has 1,300 sales agents and hopes to have 10,000 by year's end.
This transformation of the company has been funded by venture money. "We have been well-backed by NEA [New Enterprise Associates], and as one of prime sources of financing, they have been taking care of us," Hobbs noted. "We have a good stream of income."