Newspaper alliances with Yellow Pages: thing of the past p.13

By: Mark Fitzgerald

NOTE TO NEWSPAPER publishers: It's okay to hate Yellow Pages directories again.
The brief honeymoon between the traditional print rivals ? which saw a fair number of pioneering papers aligning with their local Yellow Pages to try to grow and add value for their own advertisers ? is over.
That was the consensus among media experts that emerged at the second annual Media Alliances Conference, sponsored by Princeton, N.J.-based Kelsey Group, Netscape Communications Corp. and Editor & Publisher Co. in La Jolla, Calif., Sept. 27-29.
Indeed, as these experts assessed the relative merits of a dizzying array of possible strategic media alliances ? ranging from such huge ventures as the recently announced Time Warner/Turner Broadcasting merger to modest, and once improbable, proposals such as putting ads for the corner hardware store up on cyberspace ? the one alliance that virtually everyone discounted was linking newspapers with Yellow Pages.
That represents quite a turnaround in thinking about a model that was once considered a natural alliance.
"Every time we've gone down that path ? they have been dead ends," said David Richards, an executive from Landmark Communications, who is president and chief executive officer of InfiNet, the Norfolk, Va. newspaper chain's joint venture with Knight-Ridder Inc.
"Despite protestations to the contrary, alliances between newspapers and directories are almost invariably alliances of convenience that rarely produce the synergies promised," added Patrick J. Marshall, vice president of new media services for GTE Information Systems.
Both sides in these mergers "burn out pretty quickly" on the relationship, Marshall said. "Very quickly there is an attitude of, 'Who needs them?' " Marshall said.
"This could be, in part, because of the arrogance of media, who are used to being monopolies."
The wedge issue that divides these alliances, Marshall added, is almost invariably revenue.
"Regardless of the conditions that bring directory folks and newspaper folks together, it breaks down on an issue of revenue. Directories see their listing revenue as sacrosanct, and newspapers see their classified [advertising] revenue as sacrosanct," he said.
Further, the two print media share far fewer customers than one might guess, Marshall said. For instance, in one market where he oversaw an alliance between the newspaper and Yellow Pages publisher, Rochester, N.Y., Marshall said only about 25% of the directory customers were newspaper readers.
"The customer didn't really see us as good partners," Marshall said.
That has been precisely the problem, an executive from one big Yellow Pages publishers said.
Eugene M. Bullis, vice president of interactive services for Nynex Information Resources Co., is not so quick to write off entirely alliances with newspapers. But he says the biggest problem has been that they ignore customers.
"We certainly haven't figured out a model for doing it yet," he said in an interview. "The problem is there has not been enough focus on the demand side, on the customer. It's all been driven by the supply side. [Newspapers and Yellow Pages] haven't figured out what [an alliance] can do for the customer."
Emerging Web-based services being offered by Nynex and other regional Bell operating companies may provide some modest opportunities for alliances, Bullis added.