Yellow page Publishers, dozens of them, currently distribute hundreds, if not thousands, of yellow page books. But how did this current glut of print directories come into being? More to the point, how did this multi-billion dollar industry come to be so fragmented? The answer is threefold.
Yellow Page History and Unplanned Growth
First, consider the history of the yellow pages. Probably the oldest yellow page book in the United States is the Chicago directory. According to legend, in the late nineteenth century, a printer, who had some leftover yellow paper stock, put together a list of local business telephone numbers on behalf of the local telephone exchange. From this simple beginning an industry grew.
The idea of a directory made sense as a way to popularize the use of the telephone. Telephone directories, with the backing of the phone companies (at that time Alexander Graham Bell had only recently gained patent protections) telephones and yellow page directories in particular, proliferated throughout the United States.
Only as an afterthought were the yellow pages perceived as a major source of income for the phone companies. The success of the was unexpected.
But success itself became a driving force and now, more than a hundred years later, the yellow pages have grown to be an international phenomenon, with books in “every Middlesex village and farm” (Henry Wadsworth Longfellow, 1860).
Yellow Page Proliferation
The yellow pages as a concept have been so successful that they have been widely imitated by a large and small corporations other than telephone companies. This imitation has led to fragmentation and confusion.
In fact, one piece of evidence that the yellow page success wasn't planned is that no one bothered to copyright the original logo. This logo has been used by companies other than AT&T to show that they are legit.
Many metropolitan areas are currently served by multiple yellow pages of various sizes with overlapping geographic distribution.
In the 1980s, in order to secure authorization from the United States government to expand into computer and electronic services, AT&T, which was a government regulated agreed to break up its monopoly.
As part of the arrangement with the United States federal government, AT&T spun off seven Regional Bell Operating Companies (RBOCs) or Baby Bells that would open the system to competition.
This voluntary break up of AT&T allowed new companies including US Sprint and MCI to become major players in the telecommunications industry. The yellow pages themselves remain the property of the baby bells based on the geographic area of operation.
In the newly competitive environment, the yellow pages were a coveted, predictable source of income.
Yellow Page Economics This leads us to the third major factor in the history of the yellow pages. Traditionally, the telephone companies have viewed the yellow pages as "cash cows". More precisely in business terms, they were the slow growth divisions that threw off a predictable, reliable stream of profits.
Moreover, because of the monopoly, control of new phone numbers by the phone companies, telephone directories and the yellow pages in particular, were somewhat protected from their competitors.
Like most monopolies, the telephone companies were in an enviable position. No matter how poor the service or how high the price, the yellow pages have always had a captive market.
The biggest concern of the yellow page publishers has been how to keep their profits in tact. Their answer has usually been to raise prices.Essentially, it is the extension of the model of monopolistic power. The problem for you, the yellow page advertiser, is how to cope.
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