By Wilson da Silva
THE thud you hear on your doorstep every year when copies of the Yellow Pages arrive is a familiar sound. It is also the most recognisable manifestation of a monster business that, despite making $700 million a year and spanning the country, is largely unknown.
This is the business of Pacific Access, a Melbourne-based joint venture between Telstra Corporation and four other companies, which publishes the consumer bible that lists the services of 270,000 clients and prints five billion pages of advertising every year.
Formerly owned by Telstra’s predecessor, Telecom Australia, it has been printing directories for more than 70 years.
Today, the company estimates that it is responsible for $1.96 billion worth of business generated every year, and that it reaches six million consumers a week.
Despite this, Pacific Access maintains a low profile, happy to trade behind its recognisable “walking fingers” logo and its stark “1970s-feel” yellow covers.
But recently it has been shedding its cocoon and diversifying in the market, creating multimedia products such as CD-ROM and Internet sites, selling its expertise to companies in Asia and running small business seminars with the Commonwealth Bank.
“We’ve undergone some quite remarkable changes in the past 18 months,” says Ms Jillian Barrie, national marketing manager and a 12- year veteran with the company. “And we’re on the cusp of so many more changes, on the threshold of being complete information providers to the consumer.”
A program begun two years ago to find new technological ways to the consumer has already revolutionised the way the company perceives its business.
In March, it became the first telephone directory in the world to go live on the Internet, creating a colorful point-and-click interface that allows computer users to conduct on-line searches for businesses in their area without thumbing through the 2500 classifications in its phone books.
Apart from dabbling in CD-ROMs that will have similar “background panels” to advertisements carrying pictures and audio, the company is also preparing to launch a “dial-a-directory” service for people on the move.
Called Hello Yellow, it allows consumers to call an operator and ask, for example, for the nearest mechanic or cake shop, and be instantly given three options from the Yellow Pages computer. The service is operating in Brisbane, and will be progressively introduced throughout Australia.
“In terms of business, it’s limitless what we’ll be able to deliver . . . this is just the beginning,” says Mr Geoff Donohue, who is heading up Yellow Pages’ launch into the information superhighway.
“We have the whole future opening up for us.”
Telstra owns 50 per cent of the company, with 12.5 per cent stakes held by Bell Canada, the private Australian company Edward H. O’Brien Industries and the US companies Southwestern Bell and Volt Information Sciences. Pacific Access declines to discuss its balance sheet, but analysts estimate an annual net profit at around $200 million, and conservatively value the company at around $1.2 billion. Pacific Access says it is one of the country’s largest 200 companies.
Market penetration is thorough: its 68 directories are to be found in almost every household in Australia, reaching 1.5 million in Melbourne alone. It accounts for 10 per cent of the total advertising spending in Australia, higher than almost any other industrialised country.
But Pacific Access, as its name implies, does not see itself restricted to the Australian market. It recently entered a joint venture with Shinawatra Communications in Thailand to provide telemarketing services, and is studying other opportunities in the region.
According to Ms Barrie, it is all part of the company’s new philosophy of working to 15-year business plans.
“We basically looked at where we would have to be in 2005, and worked back from there,” she says. “What we’re becoming is informnation providers, whether in the printed product or the electronic product. Wherever the consumer will be, we want to be there too.”
Despite the talk of a high-tech bravado, it is the mum-and-dad operation that remains the company’s lifeblood. Its 800 telephone sales staff deal with thousands of small businesses a day, and the company is constantly researching its client base and consumers.
“We have something like 22 million references to the Yellow Pages every week,” says Ms Barrie. “There’s an estimated 3.2 million purchases that go through the Yellow Pages weekly as a result. We’ve even fine-tuned the estimated average purchase: it’s $612.”
According to Pacific Access’ extensive research, it is small business that is leading the charge in the digital revolution, using modems and mobile phones to create virtual industries that may not even have a shopfront.
The company also runs a number of profitable sidelights to its business. It is the owner of Credittech, a debt recovery specialist that also provides business credit information and training courses for outside companies, and owns the Imagecorp graphic design studios in Sydney.
It is in the company’s interest for businesses to survive so they can continue to advertise. So Pacific Access owns and operates the National Learning Centre, which teaches small businesses how to handle customers and learn new management techniques.
Although it now flexes its considerable corporate muscle, the company remains, in many ways, a shy giant. Staff approached for this article were puzzled by the ‘The Sunday Age’ showing interest, and the company’s chief executive, who is on holidays and declined to be interviewed, warned staff to be wary of questions.
Nevertheless Mr Bob Johnson seems to have revolutionised the once sleepy publisher since taking the top job. The American-born chief executive is a 27-year veteran of business directory publishing. He left the US to head Pacific Access when it was established by Telstra in 1991.