Currently, 75% of Yell's revenue comes from the printed Yellow Pages directory and 25% from digital services. The company is hoping these numbers will be reversed by 2015. With a debt of £2.75 billion and being unable to compete with Google, the company will try to create its own 'eMarketplace' where local businesses and people can do business (or, in the words of Yell, where they can transact and connect). Yell estimates this market is potentially worth £280 billion per year, and it aims to become the local eMarketplace leader.

No cutting paper

The eMarketplace envisaged by Yell is much more than an online directory for local businesses, which of course of already exits. The company aims to expand its activities beyond advertising and become the leading provider of digital services for small and medium-sizes businesses. It will shortly start testing the eMarketplace model on university campuses, where, according to the Guardian, it will create lists of certified or recommended book shops, launderettes, letting agents, and restaurants. Certified and/or recommended businesses will be promoted to students and their parents with discounts and loyalty schemes. The newspaper has learned Yell will also introduce Groupon-style group buying schemes. At the same time Yell is hoping to sell local businesses everything from payroll and accounting software to IT hardware.

Yell hasn't given up on print. On the contrary; not only will the Yellow Pages directory continue to be distributed door-to-door, the company is also hoping to start producing local newsletters. According to the Guardian these newsletters will be produced by local bloggers and reporters and will feature information about anything from local schools and sports teams to local events. The newsletters, which will contain ads, are likely to be published both in print and online.

The City is disappointed

Investors are not yet convinced about Yell's plans; shares went down 24% after the new strategy was revealed. In the Financial Times columnist Neil Hume commented that Yell's new digital strategy comes about ten years too late and that once again, Yell has failed to mention the elephant in the room - it's mountain of debt. Hume's conclusion is that the possible collapse of Yell would at least save some trees.

Links

• Yellow Pages announces new strategy (yellgroup.com)
• Yell targets small businesses in digital turnaround plan (guardian.co.uk)
• Yell goes digital (ft.com)
• Yell share price (lse.co.uk)