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Dialing for dollars

Fingers are walking, not running, to the Internet yellow pages. Still companies are betting that the market will soon take off.

Fingers are walking, not running, to the Internet yellow pages.

A report on the Internet yellow-page market released today by Cowles/Simba Information estimated that yellow-page sites made a puny $4 million in advertising last year, a figure that is dwarfed by the multibillion-dollar revenues of their print counterparts.

Still, Internet start-ups, such as Big Book, and established telephone companies, such as Nynex, are betting that the market will eventually take off.

Today InfoSpace, a small Net yellow-pages company which is also trying to capture a chunk of the market, announced distribution deals with two high-tech powerhouses, Intel and Microsoft.

Like the hefty yellow-page books that are dumped on doorsteps around the country every year, Internet yellow and white pages are meant to be comprehensive directories for locating business and residential phone numbers and addresses. But online directories can more easily include additional information into their listings--including Internet telephone numbers, public-security keys, email addresses, and links to Web sites--and deliver that information in a timely fashion. Some online yellow pages also make it easier to quickly search for a listing regardless of where a person or business is located.

According to Natalie Schwartz, senior managing editor of local media at Cowles/Simba Information, online directories will coexist for some time with print yellow pages.

"If you're looking for a plumber and your sink is overflowing, you're not likely to boot up your computer and access a Web site," said Schwartz. "But if you're looking for an attorney or a doctor, you might have some more time to do some research. Web sites offer more extensive information than the yellow pages. There are some sites that will give you information about a doctor's specialty, their education, and affiliation."

Cowles/Simba Information's study of the Internet yellow-pages market found that its $4 million in revenues was less than one percent of the total yellow-page advertising market in 1996. By 2000, that figure will grow substantially to $124.8 million, the report projects. But that figure is still a tiny fraction of the estimated $12.6 billion that print yellow pages will rake in that year.

Smaller Internet yellow-page start-ups are liable to face stiff competition as telephone behemoths begin experimenting more with online variations of their print directories. The Cowles/Simba report also suggests that search services, such as Yahoo and Excite, might steal a good portion of the market by allowing users to locate business directly through their search engines, which don't make businesses pay for a listing.

InfoSpace has a unique approach to gaining marketshare. Unlike its competitors, InfoSpace does not intend to make its own Web site the focal point of its marketing efforts. Instead, the company cuts packaging deals with other companies, from search engines to software vendors, that put a customized interface to the InfoSpace directory in its partners' sites and products. This approach allows InfoSpace to guarantee its advertisers a broader audience since their ads will be seen in more places.

Today, Microsoft announced that it would allow users of its Internet Mail and News software to search for email addresses in the InfoSpace white pages from directly within its applications. Users of the Microsoft Network will also be able to search InfoSpace's white- and yellow-page directories beginning today. InfoSpace also cut a deal to integrate its white pages with Intel's Video Phone so users of that product can easily locate other

InfoSpace has also cut deals with more than 57 other companies, including Oracle, Magellan, and Playboy.

Because of its packaging deals with other vendors, Naveen Jain, president and CEO of InfoSpace, thinks his company can compete effectively with telephone companies and big search engines such as Yahoo.

"We say 'We can't fight with you, but we can build distribution that can fight with you,'" Jain said.