The Yell brand (which includes Yellow Pages) is to disappear as print media finally gives way to digital. The once mighty group told investors that it plans to ditch the Yell brand and put all its efforts into digital media. all of this re-branding, Yell says, will be completed by 2015.
Yell, the original search engine, is in a dark place right now. With net debt of £2.76bn and the entire group is capitalised at a paltry £260m. It’s no wonder that shareholders have fled in their droves: Yell was once a stalwart of the Footsie 100 All Share Index.
Yell’s share price languishes just a few percent above its lowest ever level and was again hammered last week after the group announced that trading, whilst officially stated as ‘in line with expectations’, had shown no real signs of improvement.
The stock market has long since accepted that printed media, as a viable growth business, is no longer an investment and see no reason why they should treat Yell’s ambition of becoming a pure digital play as anything of significance.
Yell’s share price had rallied well after a recent spell of optimism, as rumours circulated of some long awaited good news; that news finally came in the form of a tie-up with Microsoft – Yell will target SMEs with Microsoft’s suite of cloud-computing and its Office 365 tools.
But after the initially good news, optimism faded fast. Under new plans released last week, Yell say they will be ditching the Yell brand and moving into new digital areas where their potential market is significantly widened from £28b to £280b. Yell also say that their target market will be re-focussed on the young business owner.
Yell also says it plans to reduce fixed costs by £100m by the end of 2013. Although they don’t go into detail about how the cost reduction will happen, I would suspect, partly, a move from rented office space to a home-working environment and off course, with its work being carried out over the internet, there will be little need for reps driving round the countryside, from office to office, lugging copies of that yellow book with them.
Will digital succeed for Yell? At first glance there isn’t any single reason why digital shouldn’t be a success for the new Yell and it isn’t as though they have no experience in the space. However, it’s taken the Yell group some eleven years to respond to the demise of printed media to announce a full blown digital model.
In that time, every other Tom, Dick and Harry, who’s got access to a broadband connection, seems to have launched some kind of competing advertising/digital business: some of those businesses – especially the tech blogs – have completely thrashed the late starters.
Yell should have responded to the digital threat just as soon as it arrived and used its brand presence and financial clout to create an unstoppable internet-based business. Instead it was the demise of its printing empire that became unstoppable and it has been the managing of that crisis that has taken all managements’ skills and efforts.
There’s no reason to suggest that Yell will be any more successful in building up its internet business but I guess we will have to wait and see on how Yell’s new plans go but it’ll do well if it’s going to ever build a brand that was as once strong as its publishing empire.
My own view is Yell will set itself up with a new name and brand to be merged or sold off but one thing’s for certain now, as some of us have alluded to for a long while, Yellow Pages IS dead.