£11m Znode deal is something to Yell about

Yellow Pages firm Yell said yesterday it had bought an American e-commerce software firm and would start selling a range of digital services to its 1.3 million business customers worldwide.

Yell, which is due to unveil a strategy review on Thursday, will pay $18m (11m) in cash for Ohio-based Znode in a move which points to a more digital future. It will also settle Znode's existing net debt of $1.2m.

Yell chief executive Mike Pocock said: "The Znode team and their innovative technology provide Yell with a platform for our digital business and enable us to provide e-commerce solutions to small businesses, connecting them more efficiently with their local consumers.

"Their talented workforce and technological capabilities are a great addition to Yell as we move forward into new digital marketplace opportunities."

Znode's software helps businesses to expand their online presence by managing a number of websites at once. It also enables sales sites to be "pushed" to mobile phones and tablet devices, as well as social media sites.

Yell says it will offer these digital services to its current base of customers, as well as to new customers, using its 6,400 strong sales force.

Znode will be incorporated into Yell as part of its new consumer division, Yell Connect, with founders Vish Vishwanathan and David Chu taking up senior positions.

Vishwanathan said: "Joining Yell brings Znode an expanded customer base and additional development talent that will enable us to deploy our technology more broadly."

He added that, with backing from Yell's infrastructure, Znode's e-commerce platform could be adapted to suit businesses of all sizes.

Yell has seen its share price tumble in recent years as it faced structural and recession-related challenges.

Once a FTSE 100 company, declining interest in its printed offering, combined with fierce competition in the online marketplace, has seen it downgraded to a small cap.

The group is also struggling with a significant debt pile after embarking on an ambitious wave of acquisitions and expansion into Europe, the US and South America. Its biggest purchase was the 2006 takeover of Spanish peer TPI for 2.3 billion.

However, the company has been paying down its debts and its shares have picked up in anticipation of the strategy review which the firm hopes will outline the way ahead. Yesterday's announcement gave them a further boost.