Yellow Pages Look Green to FindWhat Investors

Next, to FindWhat.com's sub-$100 million revenue, the numbers associated with yellow-pages advertising look exceedingly attractive. In its Wednesday press release, FindWhat.com cited numbers from the Kelsey Group research firm forecasting that the U.S. online yellow-pages market will reach $5.2 billion in 2008, growing at a compound annual growth rate of 59%.

But it's unknown, of course, how much of that money Verizon might get, and how much of it will trickle down to FindWhat.com.

Furthermore, companies have been predicting the imminent boom of the local online advertising market since the mid-1990s. But, as the skeletons of such efforts as Microsoft's Sidewalk attest, that boom has so far failed to appear. That optimism, however, has returned this year, with Google and Overture each developing locally targeted advertising products.

Szatkowski is optimistic about Verizon's chances for success, given the telco's established yellow-pages sales force. "Trying to reach the local businesses is difficult and nearly impossible unless you're focused on that market to start with," he says. If a company doesn't already have relationships with small and medium-sized businesses, he says, "it's going to be very difficult to build up that local advertising base."