This decision was all but inevitable, given the increasing obsolescence of residential White Pages, particularly in large metro markets. YPG signaled it was moving in this direction back in 2005, when it moved to a 24-month distribution cycle for print residential White Pages.

On a related note, The New York Times reported recently that Verizon is asking New York state regulators for permission to discontinue production of residential White Pages, which it says is only used by one in nine consumers. The move, if approved, would save about 5,000 tons of paper annually.

These examples reflect the broader industry trend of eliminating residential White Pages as quickly as regulators will allow, largely to reduce costs, but also to diffuse some of the bad press telecoms and directory publishers receive for pushing too much unwanted paper into the marketplace. For Yellow Pages publishers, the risk is that eliminating White Pages will only embolden those who want to see the same thing happen to print Yellow Pages and business White Pages.

Currently, the industry is fighting a bill in California that would impose very strict opt-out rules on residential White Pages. The industry has argued that the measure is too harsh and imposes criminal sanctions for violations. The directory industry has also followed a strategy of combating all such legislation, while offering self-regulation as an alternative to legislation.

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Canpages, the leading competitive directory publisher in Canada, appears to be making a play for the CanWest media properties, which would greatly expand and diversify Canpages’ operations. According to a story this week in the Globe and Mail, Canpages is one of two companies bidding on 46 newspapers owned by the financially troubled CanWest Global Communications. The report values the assets at C$1 billion. Canpages would make the bid along with its owner, Hicks Capital, and Paul Godfrey, president of CanWest’s National Post.

If successful, the deal would leapfrog Canpages into a leadership role in Canada’s media landscape, and make it an even more formidable competitor to Canada’s leading directory player, Yellow Pages Group, which announced its year-end earnings yesterday.

Canpages also recently announced its first foray south of the U.S.-Canadian border via its relationship with U.S. independent Phone Directories Corp., where PDC will rebrand its PDC Pages IYP as Ziplocal.com (which is owned by Canpages) and rebrand itself as Ziplocal. This move is similar to Hearst’s decision to rebrand its independent directory property White Directory Publishers as LocalEdge Media. Ziplocal was a Canadian local search platform acquired by Canpages in 2009. This arrangement certainly begs the question of whether some deeper connection between Canpages and PDC looms in the future. PDC once owned Canpages’ predecessor company in Canada and the two are both Hicks Capital (formerly Hicks Muse) portfolio companies.

On the year-end earnings call, YPG CEO Marc Tellier said the company plans to make changes to its brand to keep pace with the changing media environment. ”We’re going to look at repositioning our brand, repositioning the logo to be more representative of this new digital universe,” Tellier said.

For the full year 2009, YPG’s directories division grew .9 percent to C$1.4 billion. Fourth-quarter revenues were down 2.6 percent to C$345 million. The company’s vertical media division had a very tough year, dropping 22.8 percent to C$248 million.

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Canada’s Yellow Pages Group has deepened its investment in verticals with its recent acquisition of Restaurantica, one of Canada’s largest online dining communities. Terms of the deal were not disclosed, but a report by Paul Steep at Scotia Capital suggests the amount was immaterial to YPG’s financial results.

Restaurantica was founded in 2003, and has more than 400,000 restaurant listings (50,000 in Canada) and 200,000 reviews in North America. YPG’s objective is to deepen content and user engagement in one of its most critical online search categories. The deal is interesting in part because YPG CEO Marc Tellier has in the past made statements expressing doubts about the compatibility of consumer reviews and Yellow Pages.

According to Nicolas Gaudreau, YPG’s vice president, digital media: “Approximately 80 percent of dining decisions are significantly influenced by recommendations and reviews. This acquisition allows us to reinforce our commitment to helping consumers make smarter business decisions.”

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