Magazine article Marketing

New-Look Scoot to Tap Information Potential

Magazine article Marketing

New-Look Scoot to Tap Information Potential

Article excerpt

After a disappointing start, could Scoot's fortunes be about to turn a corner? A new managing director and TV campaign may signal a recovery.

Six years ago, three individuals with backgrounds in corporate financing, IT and advertising were so impressed with the take-up in freephone 0800 numbers they hit on the idea of launching an above-the-line consumer branded information service.

Two years later Freepages (now Scoot) was launched in the south-east of England. It was a simple idea; calls to the service would be free, and money would come from companies who wanted their services listed.

Chris Chedzoy, who designed Scoot's proprietary database, Robert Bonnier who came from the corporate financing department of Swiss Bank, and Nigel Robertson, founder of direct marketing company Robertson Bushby, thought they had discovered the golden goose.

However, to date over [pounds]50m has been ploughed into the company, raised on AIM and Nasdaq, yet it has still to make a profit. Robertson decided to get out, recently cashing in his shares. Despite operating losses falling by 52% in the last quarter of 1998, the company still reported losses of [pounds]2.4m.

On the surface, and given its history, the outlook looks bleak. However, the remaining founders, Bonnier, chief executive, and Chedzoy, chief technology officer, have kept the faith and are of the firm belief the company will succeed. One Scoot supporter likens its position to the early days of mobile phone companies struggling to make profits.

Tough rivals

But Scoot has some well-established competitors: BT subsidiary Yellow Pages (which includes Business Pages, Talking Pages and Yell) and Thompson's Pages, not to mention local newspapers, local radio and specialist magazines. However, there are grounds for optimism. It has staged several coups, poaching Jon Molyneux from Apple UK and partnering telecoms company Energis.

Molyneux, who has been brought in as MD, helped turn Apple UK it into the most profitable and highest revenue earning European subsidiary. The deal with Energis also allows its customers to be connected directly to the business or service they are seeking, at no extra cost.

Furthermore, and crucially, the company is improving its business model. Previously revenues came from a set-up fee of between [pounds]1 and [pounds]300 for inclusion on the service. At the last count it had 32,000 paying business subscribers (Talking Pages has 33,000 and was launched in 1994).

The improved business model, to be launched in four weeks, takes into account the value of trade which is passed on to each subscriber and if successful could add significantly to the company's bottom line. …

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