Are there some businesses that only work as monopolies? A lot of people would say that utilities and railroads and such fall into this category, but those just depend on critical masses of customers. There are plenty of places that are served by two railroads, each in its own right-of-way; and if you could get the permits to install the pipes, you could easily run two water systems in most cities. It might be most efficient to operate a single series of (water) tubes, but there’s no particular reason why there has to be only one.

A short story recently in the St. Louis Post-Dispatch has me thinking, though.

Verizon will sell ads for its first St. Louis directory

Verizon joins more than a half-dozen competitors selling Yellow Pages ads in St. Louis this week.

[...]

AT&T Directory Operations, based in downtown St. Louis, distributes more than 1 million copies of its Greater St. Louis directory, as well as smaller numbers of neighborhood directories. Other local competitors include Yellow Book, Megabook, Impact Directories, the St. Louis Black Pages, Women’s Yellow Pages of St. Louis and Chinese Yellow Pages.

Jeff Oberschelp, a Verizon regional vice president, said the company decided to enter the St. Louis market because it believes it can offer a competitive value to advertisers here. [...]

Competitive? Is this actually a good thing for the consumer (and thus the advertiser) in the phone-directory business?

At Tino Manor in Front Royal, VA, we get at least four phone books.

This is the official phone book; it was issued in March 2006 by Sprint (now ‘Embarq’), who also send the phone bills and drive around in trucks maintaining wires. It’s actually published by Donnelley, but for Sprint. That’s not important, though. What’s important about this directory is that it is almost entirely useless.

It’s useless because it’s full of errors, in both the white pages and the yellow pages parts. Call a number listed in this book, and there’s a better than even chance that you’re going to get a wrong number or an out-of-service recording. I am in there twice, despite having only one phone line: and neither entry lists my actual phone number. The phone book has been like this for as long as we’ve lived here. Every year they print up and deliver another edition with a fresh set of errors.

It’s also useless because it covers a totally arbitrary area: it has complete listings for Front Royal and Washington (VA); white pages only listings for Culpeper and Sperryville; and business listings for Winchester.

Then there’s the Yellow Book.

This covers a much wider area, but of course it only covers those people who choose to advertise in it.

There’s also the EZ To Use Big Book:

Or, as we call it, PLUMBER, as PLUMBER is the biggest text on the cover. This one has offered up for sale its very identity.

And, finally, the Shentel Pages:

Shentel used to be the local phone company in the northern Shenandoah Valley; now they’re just an ISP and a brand name for an off-brand yellow pages.

In the end, we’ve stopped bothering with any of these books, even though at least one of them probably contains the information we’re likely to look for, because the time and consternation involved in hunting through all of them just isn’t worth the trouble.

This suggests an interesting hypothesis:

Consumers and businesses both are best served, in advertising, by monopolies or oligopolies.

And this goes double for classified advertising: every additional place that an advertiser has to buy space, and every additional place a consumer has to look for an ad imposes large costs on both the advertiser and the would-be consumer.

Classified advertising is absurdly easy to do online, but it was only when Craigslist came along and established a monopoly that it became very useful. Newspapers had been reluctant to put their classifieds online, because the classified ads drove the sale of a lot of newspapers. And all the non-Craigslist, non-newspaper classified advertising sites — of which there were thousands — didn’t achieve the critical mass that’s necessary to make them useful resources for consumers.