The consolidating marketplace for online directories, already brimming with mergers and buyouts, is on the brink of its biggest combination yet as a result of the marriage of Bell Atlantic and GTE. While the proposed $53.9 billion merger of the telecommunications behemoths is at least a year from regulatory approval, the companies already see the advantages of melding their online yellow pages services: Bell Atlantic's BigYellow and GTE SuperPages, industry watchers said.
The potential partners are barred from discussing with each other the possible consolidation of business services until each state and federal regulatory obstacle is passed, which could take 18 months. Still, that hasn't stopped some of those involved from waxing excitedly about the future. "What you're really looking at is a very strong combined shopping and directory service," said Juan Veiga, director of BigYellow, based in Reston, Va.
Individually, each service currently has its strengths. GTE has a more expansive backbone and network of servers to host small business sites. BigYellow, which got out to market earlier, has perhaps the most recognizable brand, worldwide business listings, email and slightly more enhanced commerce capabilities. Combining sales forces, advertising budgets that would exceed $4 million spent in online media, plus combining existing distribution and marketing alliances, would give a merged online yellow pages entity unsurpassed clout.
In addition, the cost-savings of a combined service could mean the divisions approach profitability quicker, said Kathy Ives, an analyst at Princeton, N.J.-based Kelsey Group. Both online yellow pages entries have been losing roughly $25 million annually. According to Ives, each company was internally projecting a break-even business in three to four years before the merger talks began.
Any combination certainly will come at some cost. The issue of which executive corps would handle business operations and whether both brands would continue to exist is uncertain, Veiga said. If past events are any indication, one of the services would be absorbed into the other, industry insiders predicted.