Small publishers gain on telcos

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The nation's top 10 Yellow Pages publishers pulled $14 billion in revenues in 2000 from their yellow, white and electronic pages, a 6.1% advance over 1999, according to a polling of Yellow Pages companies by Advertising Age.

Volume leaders represented by the Baby Bells-SBC Communications, Verizon Communications, BellSouth and Qwest Communications International-claimed $12.2 billion of that, a growth of 5% in 2000 compared with 6.7% growth in 1999 for the Baby Bells.

The big boost, and growing competition, came from the six independents on the list that recorded an aggregate $1.78 billion, up 14.2%. This same group hit pro forma growth of 24.9% in '99.

Reduction in ad growth among both subgroups points to a cooling ad climate, particularly from small advertisers. By the end of the year, growth will measure only 3.5% to 4%, according to the Yellow Pages Publishers Association. Small advertisers at Sprint, for example, pulled $405.1 million, or 87% of its $464.7 million revenue in 2000.

Acquisitions and new-market growth keyed McLeodUSA's 20.2% advance in revenue as it pushed into 40 new markets in 2000, and TransWestern Publishing Co.'s 18.8% growth in pro forma revenue came largely from its June 2001 purchase of WorldPages.com.

Yellow Book USA's 18.6% uptick was the result of expansion into metro areas, increasingly the route of expansion by independents since the Telecommunications Act of 1996 facilitated the acquisition of names by the indies from telcos. Yellow Book has established directories in Manhattan and Boston among others, and is launching a new book in Chicago in late summer.

"Indies already are seeing a shift in the share for local ads, and national will soon follow," says Joe Walsh, president-CEO of Yellow Book USA and chairman of the Association of Directory Publishers, trade group for 200 indies. He expects indies to claim 28% of the YP ad take by 2005, up from a current 12%. Indies' growth the past six years has been an annualized 30% versus 3.5% for the Bells, says a study from the Kelsey Group.

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