Yellow Book has clawed its way to a prominent role in the Yellow Pages industry, and has grabbed 50 percent of the market for Independent Yellow Pages publishers. Now it is rumored to be in takeover talks with Google.
Would Google go for it? To be sure, Yellow Book is compelling in a number of ways. It has a national footprint, increasing market share, strong leadership, a scrappy, non-union sales force – and hardly any preconceived Internet strategies.
Google could certainly leverage Yellow Book’s sales force. It is conceivable that the search company may soon hit a plateau with the number of advertisers willing to self-provision their own ads over the Web. Yellow Book’s feet-on-the- street would conceivably boost penetration, while upselling advertisers on a number of fronts.
Yellow Book CEO Joe Walsh is happy to fan the flames of such rumors. Speaking at Kelsey’s Directory Driven Commerce conference in Denver, Walsh noted that “in a lot of ways, a good Yellow Pages business complements a geo- and- search business. I’d be shocked if you don’t see partnerships happening. It just makes so much sense.”
Not a Done Deal
But it isn’t necessarily a done deal. For starters, Google would need to place a high valuation not only on the sales force, but on the print books as well. While Google has recently moved away from an Internet-only orientation by placing ads on some B2B magazines, taking ownership of a chain of print books would represent a major leap of imagination.
The sales force itself would need to be re-oriented. Today, Yellow Book has been a laggard in developing an Internet product, and it only has between $60 million and $90 million in annual Internet revenues. A Google-owned sales force, however, would be relied upon to sell Google’s various products. Forcing print sales forces to sell Internet hasn’t always worked in the past.
Finally, Google would need to ask itself whether it actually needs to own the sales channel. Today, the company has formed sales relationships with SuperPages, BellSouth, SBC and Dex, among others. These deals, in which Google’s products are typically included in a sales bundle, would certainly fall by the wayside if Google were to buy Yellow Book, which is an arch-rival of these companies.
Based on Walsh’s comments, it seems highly likely that the two companies are talking to each other. If the deal happens, it would certainly “stir things up,” as Yellowpages.com CEO Charles Stubbs says. But I bet Google doesn’t bite on this one.