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CD-ROM phone directories that sell for less than $200 are proving to be some of the hottest selling CD software, even as they raise privacy questions.

The electronic directories give small businesses many of the same abilities to create mailing lists as big companies.

The three biggest providers of the software-American Business Information Systems, Pro CD and Digital Directory Assistance-say retail sales this year could top $25 million, a figure confirmed by a tracker of CD software sales.

"[The CD-ROM phone directory category is] a top 10 seller," said Ann Stephens, president of PC Data, a Reston, Va., market research company. "Most of these books have everything listed in the U.S. It's a great way of doing searching, and people use it for everything from finding high school friends to database searches."

Ms. Stephens said American Business Information's "11 million Businesses Phone Book" is the top category seller in numbers at a street price of $29, though Pro CD's "Select Phone," selling at a street price of $150, actually produced higher revenue. Bethesda, Md.-based Digital Directory's "PhoneDisc" is third in the category in numbers sold.

All three offer a series of products, including business listings that start for as little as $29, residential listing starting at $35 and a combination of the two that contains full mailing list capabilities for $100 to $200. Updates come quarterly to yearly.

Even for neophytes, the products are simple to use. Enter a name and several will look for that name anywhere in the country. Most also have the ability to confine searches, print or export mailing lists; the more expensive versions generally allow users to search through business listings nationally, picking out specific categories and locations.

Several of the more expensive products also allow reverse searches, enabling marketers to quickly identify the names and home addresses of callers to 800-numbers whose phone numbers are taken through caller identification systems.

The companies say that while some of the sales are to people who find the products an easy alternative to directory assistance, many buyers are smaller marketers.

"You can freely download the data," said Jim Bryant, president of Pro CD, Danvers, Mass. "You can list all the hardware stores in the U.S."

Mr. Bryant said larger companies of late have discovered the directories can be a quick tool for smaller work groups compiling lists for product testing.

Pro CD sells only the CD, and is not in the mailing list business. However, American Business Information, which is, sees the CD customer as a different market from those using more standard mailing lists.

American Business Information, an Omaha-based company that buys its residential listings from R.R. Donnelley's "MetroMail" (while rivals type in the listings from white pages books), allows only 5,000 names to be printed from its most expensive "American Yellow Pages" CD-ROM, which has a street price of $99.

"We are trying to make sure we don't cannibalize from our other businesses," said Mike Kimball, general manager of the CD-ROM consumer division.

Some privacy experts say though the CD-ROM books contain no unlisted phones, even listing a phone number may be too much.

"People are consenting to put their name in a local phone book," said Evan Hendricks, publisher of the Washington-based Privacy Journal. "There is one set of expectations related to your name being in a local phone book. When you are talking about information about this which anyone in the country can look at .*.*. people should be notified."

The marketers reject his idea.

"All of this information has been accessible for a number of years through directory assistance," Pro CD's Mr. Bryant said.

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