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Jan 18 2006
Inflated Expectations, Inevitable Disappointment
So Apple missed too (net income doubles but falls short of estimates) ... But the company�s shares weren�t off as much as Yahoo! yesterday after missing analysts� estimates by A PENNY. There were blog postings here and there and a few articles today that used the �B� word, as in bubble ... bursting. Or the more restrained: Is the air starting to leak out?


The expectations for the top Internet firms�especially Google and Yahoo!�are, in my opinion, unreasonably high. A climate in which people expect these companies to produce triple-digit growth quarter after quarter is ludicrous and unsustainable. So maybe what we have is an expectations bubble. In fairness, those expectations have been fueled in part by the spectacular performance of these companies in the past 12 to 18 months.

But in the current market of inflated expectations, disappointment is inevitable and when psychology becomes �reality� then you have a kind of self-fulfilling prophecy. Case in point: this recommendation shift from �hold� to �sell.� Indeed, if everyone starts to sell, that accelerates the leakage and�voila�the bubble effectively bursts.

Clearly, it�s not as simple as that, but what is clear is that the stock market is driven by psychology (herd mentality) as much as it is by anything rational or empirical. I suspect that on Jan. 31, Google will beat estimates and everybody will be happy and buying once again.

But everyone should be a bit more sober when predicting the gains and upside and similarly less reactive on the downside.

_____________

Here�s a roundup of financial analysis about Yahoo! from the Internet Stock Blog.

Blog: Local Media Blog
 
posted by  Greg Sterling at  16:14 | permalink | comments [0] | trackbacks [0]



Jan 18 2006
Volt's DataNational Proves the Exception
Back in the not-so-old days, the rule of thumb for a Regional Bell Operating Company was that Yellow Pages accounted for approximately 10 percent of revenues and 20 percent of net profit for the corporation. This meant an RBOC could count on a steady stream of cash to fund its other businesses. Because publishers faced relatively little competition from other Yellow Pages companies, they were able to price the product in a way that would maximize their returns.

On the other hand, most independent publishers were (and still are) focused primarily, if not exclusively, on the directory business. They are able to compete by charging a rate that is typically half what the incumbent publisher charges. They also compete by scoping differently and by offering smaller directories that fit neatly on top of the incumbent�s book in the kitchen drawer. Not surprisingly, there is often trench warfare between the competing sales forces that leads to animosity.

Volt Information Sciences is an exception. Volt�s primary business is staffing services, which accounted for 82 percent of the company�s fiscal 2005 net revenues. The telephone directory segment�s sales, including their DataNational �Community PhoneBook� brand, accounted for less than 4 percent of the company�s sales but almost 19 percent of its total operating profit. Clearly, this is a critical business for Volt.


The telephone directory segment grew last year by $10 million to $82.3 million through a combination of expansion and sales growth in its current markets. In fact, �DataNational was one of the first true competitors to incumbent BellSouth Advertising & Publishing in its core area markets,� according to our 2005 Global Yellow Pages� report. DataNational competes against BellSouth in many of the same ways other independents rival incumbents, but the rancor does not seem to exist. DataNational CEO Jerry DiPippo is on the YPA board. Vice President of Sales Greg Shearer said that competition was good for the marketplace and that BAPCO was a tough but fair competitor.

DataNational also offers an online Yellow Pages site, http://www.communitybook.com. It doesn�t yet offer national search capabilities but rather listings for specific DataNational directories. We expect to see enhanced and expanded IYP and local search over the next year. In the meantime, Volt is an example of a company that doesn�t always think that it�s �we vs. they.�


Blog: Global Yellow Pages Blog
 
posted by  John Kelsey at  16:03 | permalink | comments [0] | trackbacks [3]



Jan 18 2006
News Corp. Taking on Sensis
The Australian is reporting that Rupert Murdoch�s News Corp. is planning to challenge Sensis� growing position in Australian directories, classifieds and local search with its own �listings� product. The product will be powered by News Corp.�s latest asset, Australian Local Search, which is the same shop driving Yahoo!�s Australian local search efforts. You can read the full article here.

News Corp.�s challenge is interesting on many levels, including the fact that, unlike a search engine, News Corp. takes on Sensis from the position of also claiming original, rich local business information. According to the Australian article, the News Corp. site would bring with it listings from 100 community newspapers, as well as 700,000 listings acquired with ALS. And just as Sensis has a built-in promotional platform with its print directories, News Corp. does so with its community papers.

This developing competitive match-up speaks to one key question about the directories, classifieds and local search businesses, which is whether these entities will be distinguishable (online at least) within a few years� time. It appears we might see one of the earliest examples of competition among truly morphed directory/classified/search products in Australia.

The Kelsey Report� is currently developing an Advisory that examines the intersections between directories and classifieds, in particular online.

Blog: Global Yellow Pages Blog
 
posted by  Charles Laughlin at  11:15 | permalink | comments [0] | trackbacks [0]



Jan 18 2006
Tribune Adds Video to Newspaper Sites
Tribune Interactive has signed a deal with WorldNow, according to an article in today�s MediaPost (reg. req�d), to provide streaming video for all Tribune�s online properties (newspapers and TV).

WorldNow also operates the Local Media Network, which offers video and other geotargeted ad opportunities to national advertisers across 140 local TV Web sites.

I�d hate to argue that video is a must for local newspaper sites, but it may well be in the not-too-distant future.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:34 | permalink | comments [0] | trackbacks [0]



Jan 18 2006
Gannett + 4INFO
Newspaper giant Gannett has invested in free DA/mobile local search provider 4INFO. Here�s more detail in the release. Gannett properties will gain distribution on the service as part of the deal.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:22 | permalink | comments [0] | trackbacks [0]



Jan 18 2006
Local Developments
The irrepressible Kevin Ryan has a column all about local today (roundup of recent developments).

LiveDeal.ca (a joint venture with Canada�s Torstar, which owns book publishing and newspaper properties) went live this week. The site is being integrated into Torstar�s various newspaper sites.

PremierGuide, one of the early local search platforms, has quiety built an impressive portfolio of clients: 130 newspaper, TV station and city portal Web sites, according to today�s release. Here�s a map of its customers across the U.S.

In other Canadian Internet news, Search Engine Watch points to a Toronto Star report that Google has signed a multiyear deal with Canada.com:

The multiyear partnership will provide Canada.com users with content and search related advertising, while offering Google�s advertisers access to Canada.com�s extensive reach across the country, the companies said.

There were no disclosed terms. Many newspaper sites (and some TV and radio sites) are part of the Canada.com network. Yellow Pages Group supplies the content for Google Local in Canada.

News Corp., which has been pushing aggressively into online in the U.S., said it will launch a local listings site to challenge Sensis in Australia:

The website will pull together the hundreds of thousands of business listings collected by News�s network of 100 community newspapers, along with ALS�s 700,000 listings.

The News Corp.-owned papers will also feature the listings data on their respective sites.

Blog: Local Media Blog
 
posted by  Greg Sterling at  07:44 | permalink | comments [0] | trackbacks [0]










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