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Chutzpah
Yellow Pages advertising was a $12 billion business in the U.S. last year. Certain telephone companies, in their role as directory publishers, are among the largest media companies in the country. Bell Atlantic and SBC Corp., the two largest, each took in more than $2 billion in ad revenues in 1998. Not bad for a side line. Apart from the majors, there are dozens of small publishers with local area or other special-interest directories. One is DAG Media, based in Queens. Twice a year, DAG issues its "Jewish Israeli Yellow Pages," a bilingual (Hebrew and English) book aimed at metropolitan New York's Jewish community, which includes a substantial number of Israeli immigrants. (The directory also circulates in Israel, targeting U.S.-bound travelers.) Ten-year-old DAG did slightly less than $3 million in revenue last year, filling a 1,700-page directory with ads from 3,200 sponsors. Now, according to documents filed in support of an initial public offering of stock, DAG wants to hit the big time. The company plans to use most of the IPO's $6.6 million to introduce "Newyellow," a general-market directory covering Manhattan, and compete head-to-head with Bell Atlantic's directory. The new David vs. Goliath matchup is set for June 2000. -Alan Gottesman (westendal pobox.com) is principal of West End Consulting.

THE GOTTESMAN FILE

A small fish in a large pond, DAG Media hopes to extend
its growth by challenging the market's leaders.


U.S. Yellow Pages ad volume $12 billion+
DAG Media's ad volume $2.8 million
DAG directory's page-count growth rate (5-year compounded) 34%
DAG directory's advertiser-count growth rate (5-year compounded) 28%
Source: DAG Media's SEC filings