September 11, 2006

Yellow pages publisher RH Donnelley has acquired search consulting company LocalLaunch.

The acquisition increases RH Donnelley's search marketing staff with 40 new SEM and SEO marketers from privately-held LocalLaunch. Terms of the deal were not disclosed.

"We are trying out best to provide a one stop destination for the small and medium-sized businesses, both online and offline," explained Sean Greene, VP digital strategy and business development at RH Donnelley. LocalLaunch will report to Greene he said.

RH Donnelley recently conducted a search marketing services pilot project with LocalLauch, according to Greene, who said the acquisition allows the yellow pages company to offer its search services in-house.

RH Donnelley has also been outsourcing search services to SME Global Solutions's WebVisible, and will continue to work with the local ad services company for a while longer "through a migration period," Greene said.

LocalLaunch offers prospective local search advertisers Web site, e-commerce and consulting services, and national and local search engine registration, in addition to management of pay-per-click, pay-per-call, yellow pages and local contextual search buys.

By acquiring the firm, RH Donnelley hopes to garner client leads from beyond the current pool of online yellow pages advertisers. Hospitality, real estate, mortgage and online B2B advertisers are on the list of potential client targets, noted Greene.

LocalLaunch can take the Web presences it establishes for advertisers "and optimize those for distribution through search engines," he suggested. From there, they may choose to "acquire an incremental search budget to enhance their overall marketing campaign," Greene continued.

RH Donnelley publishes the print and online editions of AT&T Yellow Pages, Dex Yellow Pages and EMBARQ Yellow Pages (formerly Sprint Yellow Pages), totaling a circulation of approximately 80 million, according to the holding company

Nowadays, the mantra of online yellow pages providers like RH Donnelley seems to be "If you can't beat 'em, join 'em." Such publishers, which have had a grip on local advertisers for decades, are finding a formidable adversary in search engines as once-loyal advertisers migrate online. Many local online ad novices test the medium through search engine marketing, which is tailor-made for geographic targeting through local keywords.

In some ways, the relationship between yellow pages publishers and search engines is more symbiotic than adversarial. The fact is yellow pages sites need search engines to help drive users to their online directories and advertisers. For instance, in January, YellowPages.com, a joint venture of AT&T Yellow Pages and BellSouth Advertising and Publishing, announced it would distribute its listings on Yahoo Local and Yahoo Yellow Pages.

Some industry insiders even foresee search engines morphing with online yellow pages. A report on local search ads published in March by local online advertising research firm Borrell Associates indicated over 60 percent of local ad expert panelists believe search engines will merge with the online yellow pages model in the next two years, contributing to the eventual demise of the print yellow pages in many major US markets.

The Kelsey Group’s "Yellow Pages, Local Search and Classifieds Forecast 2005-2010" predicts U.S. local search revenues will increase to $6.2 billion in 2010, up from $1 billion in 2005. A study released yesterday from Borrell Associates reported paid search represents 24 percent of current online local advertising, and will jump to 44 percent of the market by 2010. Google, Yahoo and other national search firms receive the lion's share of today's local paid search spends.

In October 2004 directories publisher Dex Media partnered with Web host Interland and media broker SME Global Solutions to create Dex Web Clicks, a search marketing services unit designed to help small- and medium-sized businesses move online. RH Donnelley completed its acquisition of Dex early this year.

According to the LocalLaunch acquisition agreement, the search company will remain based in Chicago, operating as a wholly-owned subsidiary of RH Donnelley. Founder and President of LocalLaunch Justin Sanger will continue on in that role. RH Donnelley "will be increasing [the LocalLaunch] staff in the next four months significantly," said Greene.

Source: Click Z