Financially stressed business directory company Yellow has one leg back in bed with its former owner Telecom in a partnership deal with Yahoo7.Yellow Pages Group today announced the deal which will see Yahoo7 rebuild its online platform for a launch some
Financially stressed business directory company Yellow has one leg back in bed with its former owner Telecom in a partnership deal with Yahoo7.
Yellow Pages Group today announced the deal which will see Yahoo7 rebuild its online platform for a launch some time in 2011.
The partnership will see customers of YahooXtra in New Zealand, which is 49% owned by Telecom, 51% Yahoo7, alongside Yellow’s base benefit from its director services.
In a frank admission, Yellow chief executive Bruce Cotterill said the current online user’s experience was not optimal.
“This partnership will take it above and beyond the basic search and do so much more. It’s all about getting back to basics and investing in our core processes and building the platform to deliver real innovation to our advertisers and users,” digital director Peter Crowe said.
The deal, which the companies have been working on for the past six-seven months, will see Yahoo7 provide a dedicated team out of its Sydney office to work with Yellow on its online platform.
Essentially, Yahoo7 will be a supplier of services to Yellow but will have access to its business directory.
Mr Cotterill described the platform as “a glorified white label” in that it will be Yahoo’s model, but branded Yellow.
During the announcement, Mr Cotterill rubbished claims earlier this week that was working on a deal with search giant Google.
He would not be drawn on the value of the new relationship but said it fitted in with the $30 million earmarked for digital development at the company which also includes a deal with Miles 33 for its internal management system.
While unclear on the date the new platform will be introduced, Mr Cotterill said it will be 2011 and supported with a marketing campaign.
Essentially, the deal with Yahoo7 is about generating more traffic for Yellow’s 120,000 paying clients and its 190,000 business listings.
However, exactly how much more traffic was expected was not made clear.
Instead of being a revolutionary step, Mr Cotterill and Mr Crowe explained the new platform was more about improving the experience for both customers and users with Yahoo7 driving building an improved platform and Yellow being able to focus on its core activities behind the scenes.
Mr Cotterill said 1.3 million people use Yellow’s printed pages each week and a further 1.5 million its white pages. Online, Yellow has 960,000 unique browsers.
“We need to continue to bring new ways for users to interact,” he said.
“This is just another step towards that.”
Yellow has gone through massive upheaval over the last few years with its separation and then sale from Telecom in 2007 to Hong Kong-based Unitas Capital and Canada’s Teachers’ Pension Plan for $2.24 billion.
Since then the company’s financial strife led to its major lenders taking an equity stake in Yellow, paring back about $1.2 billion in senior debt to $650 million.
“The challenge now… is to grow and enhance the business for the shareholders,” Mr Cotterill said, pointing out it was worth between $800 million and $1 billion well less than its original purchase price.
