While the other telcos have divested their Yellow Pages units, AT&T maintains that there is real synergy in pursuing a three-screen strategy. Rather than selling the YP unit and using the proceeds to build out its network, a la Verizon, AT&T is betting that there is a home field advantage in keeping its landline, mobile and U-verse video customers intact, and selling advertising — especially local advertising — across the digital channels.

It is a big bet. U-verse apparently has had start-up pains in an intensely competitive video marketplace. And mobile advertising obviously needs to be very sensitively handled. AT&T could always change course and spin out the YP unit. But for now, I like the ambition of it all.

Speaking at its 2007 analyst conference, Ray Wilkins, group president of diversified businesses, said his revenues are $600 million today, but that he hopes to see $1.5 billion in non-print advertising revenues by 2010. Yellowpages.com, especially, is the core of the opportunity, since it represents a giant umbrella for all the products. It is expected to get 30 percent revenue growth CAGR over the three-year period.

The basis for these projections is integrated sales from the YP sales force, a boost in searches from 2 billion to 3 billion, the integration of Ingenio’s Pay-Per-Call platform and the general growth from search revenues, especially on the mobile side. Wilkins noted that 18 million wireless handsets will be pre-installed for AT&T mobile search next year, and enabled in 20 million others. By the end of the year, he said, digital ad insertion will begin in U-verse homes.

No Comment