Directories dueling for access to gay L.A. consumers.

Seeing an opportunity to take market share from the publisher of L.A.'s lone business directory catering to the gay community, at least three companies plan to launch competitive publications in the coming months.

Los Angeles has been the exclusive territory for Mercury Capital Publishing Inc.'s Gay and Lesbian Community Yellow Pages for more than two decades, but the size and spending power of the community has begun to lure others.

"There's a bunch of us wanting to enter the market," said Rob Davis, publisher of New York-based MetroSouree Publishing Inc. "We've been looking at the L.A. market for a number of years, and we consider it to be one of the top two markets in the country for lifestyle products and high-end luxury goods."

L.A. has one of the nation's largest gay populations and commands a sizeable share of the estimated $485 billion spent by gays and lesbians in 2003, according to Wes Combs, president of Witeck Combs Communications Inc.

The result, he said, has been a surge of interest from advertisers anxious to tap into a demographic that has shown brand loyalty to gay-owned or gay-friendly businesses.

Larry Angove, president and chief executive of the Association of Directory Publishers, a Traverse City, Mich.-based trade group, agreed that the specialty niche is growing in influence. "I think you are going to see an increase of targeted directories, for whatever reason, as those buying groups become sufficient in size to support a directory like that," he said.

MetroSource, a glossy lifestyle magazine that reflects the cultural tastes and interests of the urban gay community, plans to roll out an L.A. edition in November.

Davis said that the bi-monthly, which contains a local business directory in its New York edition, plans to introduce a 45,000 circulation L.A. edition with a directory as well--the only other city-specific publication in his portfolio.

In addition to MetroSource, Gay Pages Inc., publisher of a 600-page telephone directory for Atlanta's gay community, has announced plans to enter the local market. And San Francisco-based online publisher PlanetOut Inc., an online media company serving the gay community, is coming to town. It filed a preliminary prospectus on April 29 with the Securities and Exchange Commission outlining plans to raise about $75 million in an initial public offering.

PlanetOut plans to expand its "local services" across the nation, including bundling its Web site around specific cities such as L.A. This service will be launched in a few weeks, and contain a directory of local businesses and content on L.A. hot spots, clubs, restaurants, hotels and other points of interest, said company spokesman Bryce Eberhart.

Battle lines drawn

Ralph Hyman, vice president in charge of marketing for Mercury Capital, welcomes out-of-town rivals. "Competition is great," he said.

But there are already signs the fight for market share may get ugly.

Gay Pages Inc. filed suit last month in Los Angeles Superior Court against the organizer of the West Hollywood-based L.A. Gay Pride Parade and Festival for denying it a booth during the June event.

At issue is Christopher Street West Association Inc.'s exclusive contract with the incumbent Gay and Lesbian Community Yellow Pages. The agreement prohibits competitors from taking a booth at a celebration that drew more than 350,000 people last year.

"All we are seeking is a booth with the L.A. Gay Pride festival as a gay-owned business," said Donica Callucci, president of the 15-year old Gay Pages. "There is an open invitation on the Web for 250 booths, but we were denied."

Hyman declined comment on the agreement with Christopher Street West. Rodney Scott, president of Christopher Street West, said the suit was without value.

"We offered to meet with them on two separate occasions prior to the lawsuit, and they declined," Scott said. "We think the suit has no merit."

The L.A. Pride festival, which will hold its 34th annual celebration June 18-20, has a two-year exclusivity agreement through 2005 that permits only Mercury Capital to distribute a directory as a paid sponsor at the June event, he said.

"The problem here is that the Christopher Street West Association has the ability to exclude the Gay Pages from a festival which is necessary for the Gay Pages to get its publication distributed to its targeted audience," said Eric L. Webb, a Manhattan Beach lawyer representing the Atlanta company.

"Christopher Street essentially has a monopoly on who can participate in the festival portion of the gay parade. That will harm the Gay Pages in its ability to get its product delivered to its relevant audience," he said.