Must read....DAILY BUY-SELL ADVISER
October 18, 2007
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How the rich get richer in the income trust world
Going to Google
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Our second story of the rich getting richer takes us straight to the
Internet. It puts the old-time search engine and the new-fangled one
together. Those would be Yellow Pages Income Fund (TSX-YLO.UN) and
Google (NASDQ-GOOG).
Actually, Yellow Pages has not behaved like an old-timer at all. It
has moved swiftly with the times, which is why it remains in the camp
of the successful income trusts. But it should be even more
successful, in the opinion of this advisory.
To see why, we'll follow Yellow Pages off the page and onto the web.
"Today, when a business buys a print directory ad from Yellow Pages,
that business automatically gets a free website from Yellow Pages as
part of the deal," explains the Money Reporter.
That business is also categorized under one of many business headlines
(Rental-Cars, Rental-Party Supplies, etc.) so that a search on the
Yellow Pages site can narrow things down considerably. Plus the search
can be pinpointed right down to a specific postal code.
That means the site adds measurable value for Yellow Pages' clients.
"And with that added value comes pricing elasticity," says the
advisory.
What could add more value than the biggest search engine on the
Internet? Yellow Pages has struck a deal to become the first Canadian
reseller of Google's AdWords. This service helps small and
medium-sized businesses target customers.
When anyone goes to Google looking for information, a map or a
service, ads of businesses related to that information, area or
service automatically appear. The business pays for those ads only if
the potential customer clicks on the ad.
And every time someone so clicks, Yellow Pages and Google both get a
piece of the action.
"This is the new Yellow Pages," states the advisory. "This is what you
are buying if you invest in units of Yellow Pages Income Fund. We
believe too many investors dismiss this company."
Just as many investors are dismissing another trust from a supposedly
"ancient or declining industry," adds the advisory, which has one more
brief but heartfelt recommendation to make.