2. If a “directory” is the only advertising mechanism allowed it benefits the incumbents because incumbents are the only ones who have existing brand recognition. I don’t need a directory to know about Coca-Cola or Google Maps. You would have had to ban advertising at the dawn of time for this to work.
2. Why? You wouldn't search by business name, but by need. What about "nearby bakeries" or "pop soda" only benefits the better known brands? Indexing by name isn't the only way.
For #2, I think that established brands essentially wouldn’t need to be searched for.
In the status quo I can pay to put up a billboard next to McDonald’s and say “I make a better burger two blocks down.”
But if I’m not allowed to do that a lot of people will just assume that McDonald’s is the place to go for a fast food burger.
2. That's fine, you want something new or something you don't know where to get? Query an index. You want the good ol' experience? Go for what you already know well.
If you worry about the people who would never discover anything new, then it's like they don't talk to anybody or have no desire of changing anything, but that's their decision.
And, if you were not aware, how do you think Yellow Pages made money? [1]
You go to Google, type "refrigerator" and you get two buttons
* Please show me only adds, sorted by how much they paid to Larry and Sergey
* Please show me only somewhat organic results, sorted by relevance or whatever, and discount me $1 to pay for the servers and crawers.
