Faced with falling ad revenue, online telephone directory service 555-1212.com Inc. is now charging monthly fees, starting at US$9.95 for heavy users.
The San Francisco-based company went online in January 1998, offering free searches for residential and business telephone numbers, reverse directories and toll-free phone number searches. Last fall, it began offering a pay-for-service model with its “555@Work” premium plan, charging fees to business users who wanted more up-to-date listings without having to view online advertisements.
Pamela Roussos, CEO of 555-1212.com, said the new fees only apply to users seeking more than 30 telephone numbers each month, and then, only when those searches are for residential phone numbers, toll-free numbers or reverse directory information. Searches for business numbers will continue to be free.
“What we’re seeing is advertising, the revenue stream we had enjoyed, has dropped precipitously,” she said. “We’ve been basically working up to this, getting our users used to this.”
Over the past three weeks, the company did a soft launch of the new fee structure, advising customers of the coming changes, which went into effect last night. That’s when the site unveiled a registration area in which all users must register so their activity can be tracked.
Although the 12-person, privately held company isn’t yet profitable, Roussos said user traffic continues to grow. More than half of the site’s 1.3 million unique visitors per month are business users, and Roussos said she believes the new fee structure will be accepted by heavier users because the company’s data comes from the telephone companies themselves and is the most accurate and up-to-date available.
Fees range from $9.95 per month for 31 to 80 residential, reverse directory and toll-free searches to $49.95 per month for up to 500 searches. Beyond that, the 555@Work business program fees run from $139.95 a month for up to 1,000 searches to $599.95 a month for as many as 5,000 searches. Those fees include special discounted rates presently being offered.
Neal Goldman, an analyst at The Yankee Group Inc. in Boston, said few companies moving from a free service to a pay-for-service model have been successful. The best example, he said, is the Wall Street Journal Interactive Edition, which has a “reasonable number of subscribers.”
“People will pay for stuff that has value to them,” Goldman said. “But why would I pay for something I can get elsewhere for free?”
Competitors in the online directory market include Switchboard Inc., Yahoo Inc., Superpages.com and Anywho.com.
Mark Canon, vice president for business development at Westboro, Mass.-based Switchboard, said his company doesn’t anticipate user fees any time soon.
“Not right now,” he said. “Going from free to fee is hard to do. I don’t think you’ll see us do that in the near future.”
