Hot off the presses this morning, Idearc and AT&T’s Yellowpages.com have announced what they’re calling a “cross distribution agreement.” I’ve submitted a number of questions about the agreement and I’ll be able to update this post later depending on what they share with me.
The agreement adds significant value to advertisers by extending their reach to consumers and increasing the ability to generate quality customer leads. YELLOWPAGES.COM and SUPERPAGES.COM will now also have the opportunity to share business profiles and other enhanced content from each other’s advertisers providing consumers access to more comprehensive and relevant information.
While advertisers now have the opportunity to be cross-distributed on both leading Web sites, AT&T Interactive and Idearc Media will each continue to sell their respective YELLOWPAGES.COM and SUPERPAGES.COM advertising products directly.
Here are my quick thoughts:
- This is a long time coming and a by-product of market necessity. Everyone wants and needs more traffic and both companies have built out networks. It makes sense to include other YP publishers in those networks. Competitive concerns, it seems, have been overcome.
- The automatic question that arises is: Will this be extended beyond these two to RHD/Dex and Yellowbook (and what about independent YP publishers and other local search sites potentially)?
- The revenue side of the deal was not disclosed. Clearly the site that drives the lead to the other will get a piece of the value of the click or other ad spend
- It’s not clear at this moment how the other’s advertisers will be presented on the partner side (blended in, called out, given any priority, etc.).
More later as I learn more.
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See my related post: The Need for an IYP Network
Screenwerk 
January 22, 2009 at 6:24 pm
They both need access to more inventory, and need to increase per search monetization, and this allows them to move in that direction.
January 22, 2009 at 11:38 pm
Is this going to be an equal partnership? AT&T is still a very large entity, Idearc is not. It’s second in its field, but as a corporation not very big. Will AT&T have too much clout and eventually overpower Idearc and absorb or demolish it? And is this factored into Idearc’s thinking? (Thinking is probably putting it too highly.) I worked for Idearc (and Verizon before it) for years, and the one thing the job encouraged, inadvertently, was paranoia.
January 23, 2009 at 12:02 am
Don’t have good answers to your questions . . . I haven’t had a chance to speak directly with them yet.
January 23, 2009 at 12:50 am
Greg, is this a grasp at pooling interests to create tonnage and relevance. A much bigger threat than each other has arrived and yp has not successfully connected the linkage that “yp is local search”.
I’d imagine they’ll pull back on buying distrib as a yp play on MSN, Y!, etc and save the tend of millions in external exp.
January 23, 2009 at 8:06 am
Yes, it would appear they finally agree that there are other threats larger than one another. However such initiatives have been discussed for some time.
January 23, 2009 at 4:21 pm
Sounds like a monoply brewing…
Smells like trouble already
January 24, 2009 at 9:11 pm
What are the chances you think they coordinate sales initiatives as well? For example, Idearc is much better at CPC ads and ATT has had much more traction in video so do you think they just swap listings and let the two continue to focus on what they do best. Also, let’s say ATT has significant sales resources in Texas and Idearc in Pennsylvania, do you think they cede the area to the other company? If they are sharing distribution and let’s say revenue share is 50/50, it may be more profitable for one partner not to enter a geographic or product area and just take the rev share on their site from the other partner’s advertiser.
January 25, 2009 at 3:01 pm
It’s an interesting “next step” idea. Even though the competitive landscape has changed, don’t you think that sort of thing might raise anti-trust issues? It might have in the past.
Regarding the “out of print footprint” sales issue (ie TX vs. PA in your example), it’s something I’m sure that has been or is being considered.
In order to make something like that work however, there would need to be explicit agreement about territories, etc. I don’t think you could get all YPs on board with that but maybe a couple would cooperate in that way.
I think they’re beginning to see that historically unprecedented steps need to be taken to avoid the fate of the newspaper industry. But you might argue they haven’t avoided it (delisting, debt, etc.)
January 26, 2009 at 3:51 pm
As an investor in companies exposed to SMB spend, I’m trying to determine if this is something that should concern me. On the one hand, this should simplify the sales process (an SMB now could have fewer salespeople knocking at its door), which is good for products that add value and can now rise above the fray; however, the ability to sell the same product twice into a local merchant through a different directory site (i.e. yp.com vs. superpages.com) is a nice opportunity as well that could be impacted if the directory companies started to coordinate sales and distribution more.
January 26, 2009 at 3:53 pm
Sales coordination is under discussion you can be pretty certain.
January 26, 2009 at 4:03 pm
I actuallly think this is a good thing for the space. It should ultimately accellerate the digital spend of SMB’s and benefit those technology providers who have established themselves as critical parts of the value chain. For those that have not however, this could mark the beginning of a very difficult time…
January 27, 2009 at 11:27 am
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