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MEDIA REPORTER

The publisher of the ubiquitous Yellow Pages is set to swallow its biggest competitor, once again affirming its dominance over the directories market in Canada.

Montreal-based Yellow Media Inc. - which owns Yellow Pages Group and the Trader Corp. classified advertising business - announced yesterday that it will buy Vancouver-based Canpages in a $225-million deal.

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Yellow Pages prints directories that already enjoy a more than 90-per-cent market share in most places in Canada. Canpages sought to grab a slice of that business, and to get ahead of the print giant in the online directory space.

The acquisition of Canpages further strengthens Yellow Pages' print position, which was solidified years ago as the company bought up many of its rivals. But Yellow Media chief executive officer Marc Tellier said the chance to better compete on the digital side of the business is what attracted him to the deal.

"Google is a directory. Yahoo and Bing are directories," Mr. Tellier said yesterday. "It's a different environment ... 30 years ago, there weren't that many alternatives for local advertising, but in today's digital world, local media fragmentation is alive and well, and as a result there's literally dozens and dozens of choices."

Canpages has been slightly more focused on the digital side of its business, which accounts for 23 per cent of its revenue. Yellow Pages hopes to reach those levels by the end of the year, but currently makes less than 20 per cent of its revenues from digital businesses.

The Canpages.ca website, which attracts 3.5 million unique visitors per month, will help add to the company's online presence, Mr. Tellier said, for a monthly online audience closer to 12 million.

An "augmented reality" feature developed by Canpages will soon appear across Yellow Pages' digital properties. Users can take a picture of a building on their smart phones; the Canpages feature then recognizes the building and tells them what businesses can be found inside.

Canpages has also been aggressive about building its visual search tool, Street Scene, which like Google's Street View takes 360-degree photographs of streets that users can see in search results. Photographs have already been taken in Vancouver, Whistler, Toronto, and Montreal.

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