The Death of the Yellow Pages
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The Internet has wreaked havoc with many traditional businesses and the way we conduct discourse. We have seen it change the public's habits rapidly. For example, look no further than travel, shopping and the destruction of print trade technology publishing. eBay is an industry in itself, having taken the disparate flea markets around the world and turned them into a shopping colossus. Look at the incredible phenomenon of Howard Dean's presidential bid. He has raised nearly $25 million dollars in campaign funds via small donations through the Internet. And his weblog has helped to make him better known than his rivals, leaving many of them in the dust! And now, paid search is about to join the pantheon of killer Internet greatness. It will destroy traditional information holdings along the way.
The whole search arena intrigues me. I've stated that the killer app of the Internet has turned out to be "search." Our own SearchEngineWatch.com Web site continues to thrive with thousands of new readers coming aboard every month. Similarly, our Search Engine Strategies world tour of trade shows continues to expand across North America and around the world. The enthusiasm for information about this topic seems to be boundless. Yahoo! recently reported its quarterly numbers and paid search appears to be the driver of its resurgence on the NASDAQ. Ironically, it is worth noting that when Terry Semel assumed the mantle of CEO, he pledged that new services were the key to resurrecting Yahoo. Little did he know at the time that paid search and not services would be the salve for resurrecting his Yahoo!'s stock valuation.
That's because paid search is for real, not a short-lived bubble. This brings me to my point about the Yellow Pages. The Yellow Pages have been around for over 100 years. The book has been a household "must-have" since the 1950s. Yellow Pages assets trade for billions of dollars. But beware holders of Yellow Pages assets -- your valuations are in danger. Paid search and its tangents has brought a simple technology to millions upon millions users of computers and devices. And as broadband becomes more ubiquitous, that risk of lower valuations increases exponentially. At some time in the next six years, users will turn to the Google's of the world for all of their informational needs. If that happens, then there goes the value of the Yellow Pages down the drain.
Paid search has resurrected the stock valuations of such companies as FindWhat.Com and Ask Jeeves and many other organizations. And the driver for the forthcoming Google IPO will once again be paid search. A few months ago I predicted in this column that a Google IPO would prove that the day traders were alive and well. Forget about day traders! They have reappeared in huge numbers already as we have seen the NASDAQ take off since last year. Still, a Google IPO will be something else. Thanks to (among other things) paid search, I believe it will be as "hot" as any of the bubble IPOs of the late 1990s and early 2000.