1. CORE BUSINESS, MISSION AND STRATEGY
CORE BUSINESS
We are Canada's largest directories publisher and the exclusive owner of the Yellow Pages™, Pages Jaunes™ and Walking Fingers & Design™ trademarks in Canada. Through our predecessor businesses, we have been an industry leader since we published our first directory in 1908.
We are the official publisher of Bell Canada's directories. We are also the official publisher of Telus's directories, as well as of a number of other incumbent telephone companies that have a leading market share in their respective markets. On a yearly basis, YPG publishes approximately 330 different telephone directories with a total circulation of approximately 28 million copies1. With over 381,000 customers, we manage one of the largest face-to-face sales forces for small and medium-sized enterprises (SMEs) in Canada.
We also operate the leading online directories in Canada, YellowPages.ca™, Canada411.ca, CanadaTollFree.ca, SuperPages.ca and the CanadaPlus.ca group of city sites. This online presence allows us to offer bundled packages of print and online directory advertising products on a national basis. Our network of Web sites catered to an Internet audience of 7.0 million unique visitors for the month of December 20052.
Directories are the principal form of advertising for SMEs in Canada. In fact, among SMEs that advertise, 79% use directory advertising compared to 47% for community newspapers and 38% for direct mail3. Our directories are delivered into almost every household and business in our markets, and are available online and through wireless connections. Our content draws consumers to our directories, which in turn attract advertisers.
MISSION
We have aligned our print and online strategies in a continuous effort to connect buyers and sellers, and become the number one source of references for SMEs.
STRATEGY
Our business strategy is to improve our operations and achieve sustainable growth in revenues and profitability, while pursuing two avenues for growth: organic and external.
Organic growth
Organic growth consists of enhancing and extending our print and online product and service offerings for the benefit of our advertisers and users with a strategy where we have to build usage and communicate value.
In section 4 of this MD&A, we report on the advancement and performance relative to key priorities identified for 2005.
Our three key priorities for 2006 are:
- Expansion of our business with national and regional advertisers;
- Continued focus on customer relationship management; and
- Extension of the directory category
The expansion of our leading market position into Western Canada gave us the opportunity to create a strong national platform offering many new avenues for growth. We intend to expand our business with national and regional advertisers as a result of having a national presence. We will focus on initiatives to make multi-market buying easier for these advertisers. We will also standardize our company's products such as Directory Plus and premium advertising products across markets.
As a customer-focused company, we will continue to work on two initiatives that were initiated to enhance our advertising clients' returns and yield efficiency gains.
- Our new client information automated tools, operating on a Siebel platform as a single source of information, will enable the sales and operations groups to share customer information on a common platform. Phases I and II of this implementation have been delivered; for a description of the progress to date, please refer to the “Performance relative to business strategy” report in section 4. Phase III of this implementation targets the sales force by addressing sales assignment and call planning and is expected to be delivered in 2006.
- The new content management system will be rolled out to Western Canada. This system will digitize the entire production process of our ads in this region, which will result in significant efficiency gains while offering the opportunity to repurpose our content online and through wireless connections.
The extension of the directory category is still a key priority in 2006 and will be achieved through the development of new products and their introduction into new markets. The development of additional online products will become possible following the roll-out in 2006 of a new fully keyword searchable search engine. In terms of our entrance into new markets, the 2006 launch of our first specialized guide on home improvement and the development of a second guide are amongst initiatives that we have planned. These new guides will contain both editorial content and directory information on specific topics.
External growth
External growth consists of, opportunities permitting, investments or business acquisitions. Our preference remains to expand our geographic presence in our core directory business in Canada or contiguous geographies. Our second choice remains to expand in related media.
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