# Investor driven co's. **URL:** \ **Category:** Great Debates\ **Created:** [August 9, 2004, 4:45pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045 "2004-08-09T16:45:05Z")\ **Posts on this page:** 12\ **Page:** 2
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 9, 2004, 10:08pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/21 "2004-08-09T22:08:50Z")
> [@drgnrdr07](#): > > Boy Scout11. I would ask that you please cite some examples of REAL world corporations so we can all better understand your reasoning. It is very difficult to debate with you when people challenge your points and you don’t come back with real world information from various trusted sources. It would make your arguement much stronger if you would back it with something more than this is what I think might happen. Shows us examples of why we should believe you. Do you believe everything you see and hear and if not, how much do you believe, fo what you see and hear? Are republicans truthful? Are democrats truthful? > [@](#): > > Why would a business advertise with two phonebooks that are essentially the same? They won’t reach any bigger market by doing that unless the two phonebooks are reaching different markets. Please, if you would care to debate in its entirety, my first post, I will be glad to, but by piecemeal, so much gets lost in the translation. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 9, 2004, 10:10pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/22 "2004-08-09T22:10:02Z")
> [@Boy Scout11](#): > > Tony, from my perspective, this government and big business are in bed with each other in thousands of ways unseen, just as many ways that are flagrant. If you contest this point, please let me know what you think, thanks. See, we have an assertion. I actually agree with you here, but I’m not sure what it has to do with your OP. Was this supposed to be your original point, or are you wanting to change the focus of the thread? Speaking of the OP, I’ve thought this through a bit more and done a bit of research. Firstly, the RBOC’s put out hundreds of phone books each, and I’d be willing to bet that the printing runs of these are staggered throughout the year, to keep their print shop busy, so there is no large unused season where the printers are idle. Therefore, we have no need to farm out the work which discounts my previous notion, but by the same token there is not a long downtime in which the equipment is unused thus negating your hypothetical use of this resource. Secondly, if I was a CEO of a RBOC, I would not print a book that competed with MY Yellow Pages, I would print one that competes with the Yellow Pages of OTHER RBOCs. That way, even if your hypothetical were to work, I’m not shooting myself in the foot. ---
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 9, 2004, 10:34pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/23 "2004-08-09T22:34:15Z")
Secondly, if I was a CEO of a RBOC, I would not print a book that competed with MY Yellow Pages, I would print one that competes with the Yellow Pages of OTHER RBOCs. That way, even if your hypothetical were to work, I’m not shooting myself in the foot. No Tony, that wouldn’t happen, because they know all the tricks and if one did it to another, they would retaliate. ---
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 9, 2004, 10:35pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/24 "2004-08-09T22:35:19Z")
OOps, I mean DMC. ---
**Author:** ![TonyF](https://avatars.discourse-cdn.com/v4/letter/t/9de053/32.png) [@TonyF](https://boards.straightdope.com/u/TonyF)\ **Post date:** [August 9, 2004, 11:14pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/25 "2004-08-09T23:14:11Z")
> [@Boy Scout11](#): > > Tony, from my perspective, this government and big business are in bed with each other in thousands of ways unseen, just as many ways that are flagrant. If you contest this point, please let me know what you think, thanks. I would agree, to a certain extent… In some cases business and government mix in unethical ways, sure; much has been made of Halliburton in this vein. In general, I wish it weren’t so hard for small businesses be maintain themselves. But let’s not forget there are many cases in which they mix ethically, and often only big business is qualified to do tasks required by the government. So that much, I’ll concede. But what does this have to do with investor-driven companies? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [August 9, 2004, 11:17pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/26 "2004-08-09T23:17:08Z")
> [@Boy Scout11](#): > > Do you believe everything you see and hear and if not, how much do you believe, fo what you see and hear? Are republicans truthful? Are democrats truthful? Man, if this guy ever connects with **Aldebaran** (a.k.a. my post is my cite), there might be a posting feedback loop that will never end. 😃 ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [August 9, 2004, 11:25pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/27 "2004-08-09T23:25:22Z")
> [@Boy Scout11](#): > > A GREAT DEBATE, is when anyone goes from one line to the next, speaking on every single detail, untill all has been addressed and IF, one cannot do that, they prove, that they are incapable of a GREAT DEBATE!!! Sorry to be picky about it, but that is not, by definition, what a Great Debate is on this message board. _“For long-running discussions of the great questions of our time. This is also the place for religious debates and (if you feel you must) witnessing.”_ You’ve posted a “great question of our time.” We are discussing it. You are demanding that each poster discuss “every single detail” in your original post each and every time we reply. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [August 9, 2004, 11:34pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/28 "2004-08-09T23:34:10Z")
> [@Boy Scout11](#): > > Now that is something I didn’t know, but can can you tell us all if Donnely has a parent co. and who that parent co. is? Funny you should mention that – there’s a lot you don’t know about the yellow pages business, and that lack of knowledge may be what’s preventing people, including you, from understanding exactly what you’re getting at. While there may be one or two that I’m unaware of, the vast, _vast_ majority of companies publishing yellow pages do not do their own printing. RR Donnelley is the largest printer of them, but there are many, large and small, around the country (in fact, many yellow pages publishers use multiple printers). The printers do it pretty much as you’d imagine – the yellow pages are just one particularly big order among hundreds or thousands that they take in a year. Some companies actually compile the books themselves, others outsource it, others still have sold the business entirely to independent companies (one of which, R.H. Donnelley, had a common origin with R.R. Donnelly – they got their start printing books for some of Sprint’s predecessor companies – but which now has completely separate ownership and management). Yellow Pages publishers’ assets are not in printing machines --the assets are in customer lists and sales forces. For many years, yellow pages publishing was something that was done exclusively or almost exclusively by the telephone companies – competition is just now arising, and the competition is coming from upstarts (admittedly, often _large_ upstarts). Let’s look at the business. In fact, historically, it was as rapacious a monopoly as one could imagine – exactly the kind of thing you seem to be railing against. Incumbent yellow pages companies routinely realized returns on invested capital well in excess of 100%, and phone companies jealously guarded the phone number listings necessary to publish a competing product. Microsoft and heroin dealers looked with envy at the returns realized by the non-regulated but monopolistic yellow pages providers (it’s really much more complicated than that with the non-regulated business providing excess returns on the regulated local phone business, etc. But still). Early competitors had to start from scratch – essentially, they took the local yellow pages and started calling people, offering them free or dirt-cheap ads in the first few editions of the book. The actual book – printing it and delivering it to customers, was a trivial expense compared to the effort required to compile the data that make up the book useful to consumers and desirable for advertisers. But it could be done – Clark McLeod was publishing yellow pages successfully before 1996, and his became more popular in many of his market areas than the Bellcos’. That changed with the telecommunications act of 1996. Telcos were compelled to make their lists available to competitors. This, combined with the enormous returns the business had (and has) is what spurred competitors to try a second book in a territory. While they might use the same printer (or not), they are not doing so with the cooperation of the incumbent provider. Indeed, the incumbents had to be dragged kicking and screaming into the new environment. They sued over using the word “yellow,” they sued over using the _color_ yellow, they sued over everything. OK. Now, if you’re a small business, it is kind of annoying right now. Because yes, you have to advertise in both books (I’m not aware of any major market areas with more than two competitive books, though I’m sure they exist) to ensure that all consumers who consult “the yellow pages” will see your ad. But competition is relatively new. You’re already starting to see more innovation – coupons, internet ads, package deals with cable TV advertising, etc., that make the overall process of reaching customers more attractive for small businesses. You’re also seeing a slowing of the growth in prices, despite that yellow pages advertising is one of the more effective uses of ad dollars, particularly for small firms. In the longer run, one can expect that a competitive yellow pages product will result in lower total realized prices for advertisers as competition drives returns down from the supra-normal levels that monopoly allowed. Given that, I’d suggest that the yellow pages business is a weird enough one-off that it’s not a good hypothetical for making any larger point of any kind. ---
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 9, 2004, 11:34pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/29 "2004-08-09T23:34:39Z")
> [@kunilou](#): > > Sorry to be picky about it, but that is not, by definition, what a Great Debate is on this message board. > > _“For long-running discussions of the great questions of our time. This is also the place for religious debates and (if you feel you must) witnessing.”_ > > You’ve posted a “great question of our time.” We are discussing it. You are demanding that each poster discuss “every single detail” in your original post each and every time we reply. NO, I AM NOT AND NOT THE FIRST ONE OF YOU AND NOT THE LAST ONE OF YOU, HAS DEBATED MY FIRST POST, LINE FOR LINE. ---
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 9, 2004, 11:44pm UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/30 "2004-08-09T23:44:17Z")
> [@manhattan](#): > > Funny you should mention that – there’s a lot you don’t know about the yellow pages business, and that lack of knowledge may be what’s preventing people, including you, from understanding exactly what you’re getting at. > > While there may be one or two that I’m unaware of, the vast, _vast_ majority of companies publishing yellow pages do not do their own printing. RR Donnelley is the largest printer of them, but there are many, large and small, around the country (in fact, many yellow pages publishers use multiple printers). The printers do it pretty much as you’d imagine – the yellow pages are just one particularly big order among hundreds or thousands that they take in a year. Some companies actually compile the books themselves, others outsource it, others still have sold the business entirely to independent companies (one of which, R.H. Donnelley, had a common origin with R.R. Donnelly – they got their start printing books for some of Sprint’s predecessor companies – but which now has completely separate ownership and management). > > Yellow Pages publishers’ assets are not in printing machines --the assets are in customer lists and sales forces. For many years, yellow pages publishing was something that was done exclusively or almost exclusively by the telephone companies – competition is just now arising, and the competition is coming from upstarts (admittedly, often _large_ upstarts). > > Let’s look at the business. In fact, historically, it was as rapacious a monopoly as one could imagine – exactly the kind of thing you seem to be railing against. Incumbent yellow pages companies routinely realized returns on invested capital well in excess of 100%, and phone companies jealously guarded the phone number listings necessary to publish a competing product. Microsoft and heroin dealers looked with envy at the returns realized by the non-regulated but monopolistic yellow pages providers (it’s really much more complicated than that with the non-regulated business providing excess returns on the regulated local phone business, etc. But still). > > Early competitors had to start from scratch – essentially, they took the local yellow pages and started calling people, offering them free or dirt-cheap ads in the first few editions of the book. The actual book – printing it and delivering it to customers, was a trivial expense compared to the effort required to compile the data that make up the book useful to consumers and desirable for advertisers. But it could be done – Clark McLeod was publishing yellow pages successfully before 1996, and his became more popular in many of his market areas than the Bellcos’. > > That changed with the telecommunications act of 1996. Telcos were compelled to make their lists available to competitors. This, combined with the enormous returns the business had (and has) is what spurred competitors to try a second book in a territory. While they might use the same printer (or not), they are not doing so with the cooperation of the incumbent provider. Indeed, the incumbents had to be dragged kicking and screaming into the new environment. They sued over using the word “yellow,” they sued over using the _color_ yellow, they sued over everything. > > OK. Now, if you’re a small business, it is kind of annoying right now. Because yes, you have to advertise in both books (I’m not aware of any major market areas with more than two competitive books, though I’m sure they exist) to ensure that all consumers who consult “the yellow pages” will see your ad. But competition is relatively new. You’re already starting to see more innovation – coupons, internet ads, package deals with cable TV advertising, etc., that make the overall process of reaching customers more attractive for small businesses. You’re also seeing a slowing of the growth in prices, despite that yellow pages advertising is one of the more effective uses of ad dollars, particularly for small firms. In the longer run, one can expect that a competitive yellow pages product will result in lower total realized prices for advertisers as competition drives returns down from the supra-normal levels that monopoly allowed. > > Given that, I’d suggest that the yellow pages business is a weird enough one-off that it’s not a good hypothetical for making any larger point of any kind. Everything you said made good sense, thanks. I trust almost no one, but I like to gather information from many sources, because this government proves many things I dislike. Many times I say things that are guess work and try to piece together what looks and feels correct. Your post from beginning to end looks and feels correct. Thanks, Jim ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [August 10, 2004, 3:31am UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/31 "2004-08-10T03:31:46Z")
> [@Boy Scout11](#): > > No Tony, that wouldn’t happen, because they know all the tricks and if one did it to another, they would retaliate. From [here](http://www.kelseygroup.com/news/2004/sptimes_040726.htm): > [@](#): > > Meanwhile, Verizon not only publishes directories within its own service territories, **it is the only regional Bell company to branch out significantly into other Bell territories to compete as an independent directory.** ---
**Author:** ![Boy\_Scout11](https://avatars.discourse-cdn.com/v4/letter/b/f08c70/32.png) [@Boy\_Scout11](https://boards.straightdope.com/u/Boy_Scout11)\ **Post date:** [August 10, 2004, 4:35am UTC](https://boards.straightdope.com/t/investor-driven-cos/259045/32 "2004-08-10T04:35:41Z")
> [@DMC](#): > > From [here](http://www.kelseygroup.com/news/2004/sptimes_040726.htm): It seems as if there is retaliation, but it seems you are correct as well. Cool. By the way, there is at least one major discrimination by the yellow pages in my industry and it is easily seen where I live. I even got the yellow pages to change it one year, but the next year, it went right back and they would not answer why, so the person I spoke with and got to change the location of a heading, must have been fired, or at least caught fire works in their in basket. [Previous page](https://boards.straightdope.com/t/investor-driven-cos/259045.md?page=1)