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A string of bad news at Yellow Pages Ltd. worsened on Wednesday as the company announced the departure of its chief executive officer.

Shares in the company, long known for its heavy print directories, slid more than 12 per cent in morning trading after the announcement of the exit of CEO Julien Billot. Chief financial officer Ken Taylor, who joined the company in late March, will lead the company as it searches for a successor.

It's the latest shakeup of upper management at Yellow Pages, which has added a new CFO and chief operating officer in the past four months following major cost-cutting and amid warnings the company will fall short of its annual target for digital-revenue growth.

Mr. Billot took the reins in early 2014 and embarked on a four-year strategy to refinance debt and return to revenue growth by 2018. By 2016, with two-thirds of revenue coming from digital services – up from 40 per cent in 2014 – the plan appeared to be on track.

"All of a sudden, starting late last year, the wheels kind of fell off the bus after a series of bad news," said Vahan Ajamian, a research analyst at Beacon Securities Ltd.

In the fourth quarter of fiscal 2016, the company reported print revenue was down 24.8 per cent year over year and revenue had fallen 2.8 per cent over all. The share price has since plummeted, dropping from around $22 in November to $6.69 on Wednesday.

One of the most troubling details to come out of the fourth-quarter report was that the mix of digital services being used by clients shifted from higher-margin products, such as listings on the Yellow Pages website, to lower-margin options, such as the resale of Google or Facebook ads. This unanticipated development coupled with disappointing revenue growth driven by freshly acquired Juice Mobile. As a result, the company reported an impairment loss of $600-million.

"Customers were looking to the big names, they wanted to be visible on Google or Facebook. Then we would provide a resale option," said Joëlle Langevin, a Yellow Pages spokesperson, adding that Yellow Pages collects a small administration fee when it resells a Google or Facebook ad.

In May, management laid out a new digital strategy, aiming to provide better search-engine marketing for their clients.

Yellow Pages has worked toward becoming a digital advertising provider for small and medium enterprises with a number of offerings including YP Dine, Bookenda and ComFree/DuProprio. However, according to Avery Swartz, the founder of Camp Tech, the small and medium-sized companies that she advises don't usually look to Yellow Pages for their digital advertising solutions.

"No one is thinking about Yellow Pages. It almost never even comes up. If it does, it's in the context of an SEO conversation," Ms. Swartz said. "The relationship now with Google and other search engines for small businesses is kind of like the relationship with White Pages or Yellow Pages before."

Ms. Langevin argues that Yellow Pages still provides valuable exposure to small businesses through its syndication service.

"The advantages of having a listing on a Yellow Pages platform is we syndicate to partner pages like Yelp or Bookenda," Ms. Langevin said. "A listing on a Yellow Pages website or app is syndicated to all the media properties that you need to be on to be found by the consumer."

Tod Maffin, president of digital-marketing consultancy EngageQ Digital, suggests the company will need to focus on social engagement moving forward to succeed.

"By far, the next big wave is going to be in messaging and very quick responses. Now, there are more people who use Facebook Messenger than almost anything else," he said. "That social engagement is important. More and more people are using social media to get their information."

In Wednesday's news release, Yellow Pages pointed to its second-quarter earnings report on Aug. 10 for more insight on what's to come, noting it is still expecting to hit its 2017 total revenue targets and is aiming to enter 2018 with a reworked digital strategy.

With files from Susan Krashinsky Robertson

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