The Yellow Pages Group has hit straight back at New Zealand Post by announcing yesterday the creation of 100 new jobs to be spread across every Yellow office in New Zealand.
Yellow chief executive Bruce Cotterill said the $8 million annual investment would strengthen the sales team as Yellow looked to build on "robust" 2009 financial results and position itself for future growth.
"During the global financial crisis, Yellow was proven to be New Zealand's most resilient advertising media," he said.
New Zealand Post announced last week it was setting up a new service in Auckland that it hoped would become a first port of call for anyone wanting to find information on businesses, services and community events in their local area.
The state-owned company's new venture is called Localist and is being chaired by former Kiwibank chief executive Sam Knowles.
The aim was to take the best traditional directories had to offer, adding in social media, Mr Knowles said.
Small businesses found it hard to make sense of digital and social media, and paid too much for basic advertising services.
"It's simply not true that current online search engines and directories have it all covered when it comes to finding truly local information.
"The content has to exist before it can be found," he said.
Localist, which would be launched next year, was part of a plan New Zealand Post had been working on to extend its communications expertise into new media.
A standard online listing would be free of charge, while a range of advertising options would be available.
The information Localist provided in a statement included a question-and-answer sheet in which the venture raised the issue of why another directory was being launched when "Yellow Pages is struggling".
Localist said businesses and consumers in Auckland had told it there was a need for better information services at a local level.
Late last month, Yellow Pages Group said a process to consider offers to buy the company had been stopped.
Stakeholders' expectations of value were unlikely to be met in the market, for now.
The group's banking syndicate intended to complete already advanced plans to restructure the group debt, and to take a long-term view as owners of the business.
Yellow Pages was bought by Hong Kong-based Unitas Capital and Canada's Ontario Teachers' Pension Plan for $2.24 billion in March 2007.
Mr Cotterill said Yellow still had a 90% market share in a market dominated by small-to-medium businesses, for whom advertising with Yellow was the first and most effective marketing for their products.
The spend on the new workforce highlighted the confidence the Yellow management team, board and financial backers had in the long-term prospects of the business.
"We expect this investment in new sales jobs will raise profitability over coming years by a decent margin.
"We also expect our sales volume to increase and are supporting this by implementing an improved customer experience programme and customer relationship system."
The new staff would be employed in a variety of sales roles, including specialist digital media sales and outbound representatives, he said.
Customers throughout New Zealand would be serviced directly, either face-to-face or through the telephone.
Yellow was establishing a new outbound call centre and with fewer customers to manage per staff member, Mr Cotterill was confident customers would notice an improvement in service.
