There’s a lot of discouraging news for the yellow pages industry these days. A combo of unhappy financial numbers mixed with reorganization and layoffs has demoralized many in the industry. Is it “game over” for yellow pages companies? Not necessarily. Not if leadership works on future strategy.

A few years ago, I warned the industry that online searcher trends indicated problems for the yellow pages. It’s been a near “perfect storm” for the yellow pages industry since then, and the pace of blows seems to have ramped up further as we go into 2011, with layoffs and possible mergers continuing in widening ripples following notable Chapter 11 reorganizations.

Even among some executives in yellow pages companies, there is some resigned belief that print yellow pages usage and associated ad revenue may erode as more consumers get business information via Internet and mobile search. Sadly, some of the upper-hand that these companies enjoyed in the earlier days of the Internet appears to be rapidly transforming into lost potential in 2011.

The difficulties in replacing gigantic amounts of revenue from legacy printed advertising products with newer, cheaper Internet ads, coupled with a sluggishness to innovate, while attempting to compete against a plethora of online local companies (not least of which is Google) — seem to be increasingly insurmountable.

Some belief in inevitability of YPs to evolve and compete seems to be further pervading Wall Street, as analysts seem to be considering it “just a matter of time” before YP companies are inoperative, and some asset-sales virtuosos seem to be sharpening their knives and salivating at the prospect of cutting the companies up and selling off the pieces.

I have some level of idealism, so I dislike the short-term strategy that I see infecting the industry. I think it’s terribly short-sighted to think that there’s no hope of transforming the companies into new money-making machines — it shows a lack of imagination and a completely ruthless dedication to the short-term profit while wasting the potential of a future.

Aside from my idealism, I think there actually are some highly-compelling reasons to consider that the game doesn’t have to be over. Time and again, some of the more visionary people in the yellow pages sector have innovated products that continue to give Google a run for its money.

As I challenged the yellow pages industry two years ago in my post, “What Could Save The Yellow Pages? 10 Ideas“, these companies should really be pushing innovation. They should be creating agile advanced development units that are empowered to experiment with local products.

They should be beefing up the personnel in these units, using significant salaries to attract top talent, and insuring that they retain the real innovators they already may have in-house.

It’s not widely-known, but Google Maps didn’t originate map-based search interfaces — yellow pages companies did it first. Google merely tweaked the concept with some seductive AJAX and tacked it onto the huge audience of consumers using regular web search.

Some yellow pages companies, particularly in Europe where Google hasn’t developed the local search marketshare it has in the U.S., are innovating and doing a pretty good job at coming up with products that are compelling and sticky for consumers.

For instance, Yell.com‘s work in 3D map navigation imagery and augmented reality are arguably better in some ways that Google Maps. (I mentioned seeing some demos of this when Yell’s Matthew Bottomley presented some of their work at the BIA/Kelsey DMS conference.) Here’s a video demo of their application:

YouTube Preview Image

The race is not over for the yellow pages and other local business information sites in interfaces such as the iPhone, Android, iPads, and other tablet PCs or smartphones. Gaining a foothold in these sorts of interfaces could translate back into increased marketshare in the regular Internet.

Unfortunately, a number of companies and executives appear to be squandering the future in return for comparatively minor cost-savings in the current financial quarters.

It’s quite clear that if there’s to be any future at all for yellow pages companies, it’s to be in their interactive departments. If you’re going to cut employees, you’d better only be doing it on the legacy print side of the house.

Otherwise, the message you’re sending to employees, stockholders and Wall Street is that you don’t plan to be around very long. Don’t you think stockholders might want to have a viable stock that could work for them for many years as opposed to only a few dollars in this quarter?

Oh, and one other thing — I don’t think the best innovation can come from oversees outsourcing. Particularly in terms of local interactive products. People who have grown up in a country which barely has street addresses and are not highly familiar with our culture will not be as effective at creating the local products for our market.

So, make your choice, yellow pages industry! Accept some risk through putting your remaining eggs in the basket of innovation, or else take the easy and predictable route of dying a death of a thousand cuts through repeated cost-cuts and layoffs of your primary assets.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Local | Local Search Column

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About The Author: is President of Argent Media, and serves on advisory boards for Universal Business Listing and FindLaw. Follow him @si1very on Twitter.

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  • http://CopelandSearchMarketing.com Mike Mueller

    I totally agree with you, Chris, although I’m a little less optimistic than you that YPs can get their act together. I worked for one of the big ones as a search engine marketing manager in my home state. Simply put—their focus is on cutting costs, not innovation. Of course, they will tell you differently, but there is widespread panic behind closed doors. The print product acted as a cash cow and helped float the rest of the company. Breaking up is hard to do.

    The other challenge is the sales force. The company can innovate all it wants, but a traditional, print-oriented (and unionized) sales force that doesn’t embrace the internet spells trouble for any YP that’s trying to turn the corner.

  • http://corp.lawgical.com Trent Carlyle

    They YP’s seem to have already been relegated to B player at best when it comes to online. They are one of those other places where you should be if you want a complete online local presence. Superpages is doing some interesting things with their marketing and branding and content, but no real innovation. I’d love to see someone from this space step up, but for now Google, Yelp and the niche directories are the future. If the yellow pages call, I’m hanging up but now I have Yelp and Google calling and I want to hear more. Wonder how many people at the YPs remember the good ol days?

  • OscarSMarques

    The actual YP culture is the problem. We should embrace change, re-train our sales force, launch new online, mobile and print (still alive and kicking in some markets!) products that better serve our customers but never only act as a commissioner for other companies’ products such as Google. If we chose this path, our margins will be eroded and we will disappear or be sold in multiple pieces in less than 2 years.

  • LostInNewYork

    OscarSMarques, above, is dead on right… I completely agree.

    Mr. Mueller, on the other hand, is obviously totally out of the loop and has no clue what he’s talking about…

    “The other challenge is the sales force. The company can innovate all it wants, but a traditional, print-oriented (and unionized) sales force that doesn’t embrace the internet spells trouble for any YP that’s trying to turn the corner.”

    Where do I start with this? First of all, “unionized”? Really? Do you have any idea of the policies that are enfored on sales reps in some YP companies today? Policies that the so-called union is powerless to stop? I am in YP sales, and let me tell you, the union is useless to stop any of the nonsense currently going on. I mean, a sales force union? Ridiculous. Second, the sales reps are hardly the biggest “challenge” facing the YP industry today. They are in fact the best thing YP has going for them. By a lot. It’s the YP companies inability or refusal to care one iota about the reps and their concerns, nor the customers on the street, that is driving the industry to ruin.

    How dare you blame YP problems on the sales force? Why are the most ignorant people always the first to speak about things they know nothing about?

  • http://www.tyloon.com/ tylooner

    ‘the future of the yellow pages’ was discussed back in 2006, http://www.kelseygroup.com/ddc2006/index.asp, at that event I’ve share my opinion with many attendees from many companies. the yps jumped from the printed version to the online version, but then what? I’ve told them they were sitting in a goldmine, database! turn that database into SEO, add a website builder, add multilingual features (including the SEO), add tools (shopping cart, invoice system, business card system, w/site templates, etc.)…2 b continue…(I’m working, b back)

 

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