Local Onliner

While the other telcos have divested their Yellow Pages unit, AT&T still maintains that there is real synergy in pursuing a 3 screen strategy. Rather than selling the YP unit and using the proceeds to build out its network, as Verizon did, AT&T is betting that there is a home field advantage in keeping its landline, mobile and U-Verse video customers intact, and selling advertising –especially local advertising –across the digital channels.

It is a big bet. U-Verse apparently has startup pains in an intensely competitive video marketplace. And mobile advertising needs to be very sensitively handled. AT&T could always change course and spinout the YP unit. But for now, I like the ambition of it all.

Speaking at its 2007 analyst conference, Group President of Diversified Businesses Ray Wilkins says that his revenues are $600 million today, but that he hopes to see $1.5 billion in non print advertising revenues by 2010. Yellowpages.com, especially, is the core of the opportunity, since it represents a giant umbrella for all the products. It is expected to get 30 percent revenue growth CAGR over the three year period.

The basis for these projections is integrated sales from the YP sales force, a boost in searches from two billion to three billion; the integration of Ingenio’s Pay-Per-Call platform; and the general growth from search revenues, especially on the mobile side. Wilkins notes that 18 million wireless handsets will be pre-installed for AT&T mobile search next year, and enabled in 20 million others. By the end of the year, he says that digital ad insertion will begin in U-Verse homes.