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In one corner is Yellow Pages Association president Neg Norton, who writes about the profile of consumer-users of IYP products (based on the assn's earlier study with comScore). Norton extolls the advertiser benefits of IYPs vs. search engines (more qualified leads, who spend more).

In the other corner is Justin Sanger, the CEO of LocalLaunch, with whom I had a very interesting lunch in Chicago recently. Sanger writes in his ClickZ column that — correct me if I'm wrong here Justin — Yellow Pages essentially cannot compete with the major search engines for traffic and product utility (user experience) and so should concentrate on doing what they do best: sales.

In other words, Sanger is saying that YP sales forces should effectively be channels selling search traffic — wither IYPs as destination sites.

For many reasons and from a practical standpoint, I don't think Yellow Pages' could afford to do that. In the U.S. at least it would signal the beginning of a gradual but eventually substantial revenue decline driven by usage decline. The product needs an online (and arguably wireless), user-facing component to remain vital.

Sanger cites Verizon's Eric Chandler who made the somewhat amazing public comment that SuperPages has more budget commitments from advertisers than it can fulfill with its own traffic. The press characterized what SuperPages was doing as taking on a local SEM agency role. While that's effectively true in one sense, it's partly a measure to deliver value to local Verizon advertisers while the IYP (which is fast evolving into something else) beefs up its own traffic.

Verizon recently overhauled its site, better integrating the relatively new Shopping.com/eBay/Web search features into a more streamlined and uniform interface.

As Sanger suggests, IYPs cannot compete with the frenzied product evolution of search (my head is spinning like Linda Blair's in the Exorcist from all the search announcements). But the YP/IYP predicament is very much like the newspaper predicament in a sense — usage growth is online, but the environment is radically more competitive than for the print product. Thus the online universe is considerably more complex than offline — yet it cannot be ignored or wished away.

IYPs (or whatever we will call them going forward) need to figure out how to do supremely well the 5 – 7 things that they can do supremely well, and do those things. They also need to rep. third party traffic while they build themselves as destination sites.

It's a very tall order and, over the long term, the stakes are very high.

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Related: ReachLocal's CEO, Zorik Gordon, discusses the challenges and opportunities of IYP/local search marketing.

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