The information media industry has arguably been the most impacted segment thanks to the growth of ICT, especially the Internet. The printed thick volumes of yellow pages are no exception. Yellow pages usage among people below 50 years will be nil in the next five years, prophesied Bill Gates recently. Google and several other search engines now provide telephone number services, detailed maps and directions of area wise searches, which were earlier the exclusive domain of Yellow Pages companies. Gates' prediction appears to be a pessimistic prediction and may not spell doomsday for the Yellow pages print publishers, however there will be a need to address the growing clout of the Internet.

Despite the growth of the web media, the print yellow pages industry has been growing at around 2.5-3.5% per annum. The worldwide directory publishing market was over $31 b in 2006, according to Simba Information. The US makes up for approximately half of the global directory publishing market and is slated to cross $18 b by 2012.


Offshoring directory services

In the directory publishing space, the production process is more offshoreable than printing from India point of view, as it involves non-physical transfer of data. The cost of production personnel in India is almost 7 to 8 times lower than those in the US. For an average $16/hour for a graphic designer in the US, an Indian counterpart costs approximately $2.5-3.5/hr. The exhibit below lists out some of the currently offshored services and others with potential offshoreability.

Source: ValueNotes Research

The maturity and experience of the Indian vendors in the publishing space and directory publishing services can be leveraged to cater to this segment in the publishing industry. Some large offshore vendors like Macmillan, OfficeTiger and Infomedia offer a range of services, while there are a few small vendors servicing some independent yellow pages publishers in the US. Infomedia already has significant experience in the local directory publishing market and is India's largest Yellow Pages publisher.

The Opportunity

The offshore potential in the US yellow pages space alone is estimated to be around $1.1 b. This does not include the online opportunities, which can increase this potential significantly. Compared to the overall opportunity in the publishing offshoring space, the prospects in yellow pages publishing currently appear small; however this can be turned into a significant opportunity by the existing publishing BPO vendors. The information search business is burgeoning globally and usage of yellow pages is definitely set to increase. Moreover online opportunities provide an entire gamut of services that can be done remotely. What is required is the adaptability to new technologies and identifying changing customer needs to grab the online medium. The employee skill sets required for servicing the publishing industry are definitely transferable to a great extent in catering to the yellow pages industry also. Independent yellow pages publishers released an estimated 129 new titles in 2006, according to ADP. While getting large customers is a key challenge for vendors, the growing number of titles by independent publishers also presents a big opportunity.

This article is an excerpt from the recent bimonthly update of the report, "Offshoring in the Publishing Vertical: An Update ".