stops competing with Google, sells its adWords instead

Yell Group had been expecting to lose 12 percent of its ad sales in the first three months of this year. As a sweetener ahead of its May 20 earnings, the business directory says it’s becoming an authorised re-seller for Google AdWords. Well, if you can’t beat ’em, join ’em attracted a fifth more online ad sales in 2008 and it now has 217,000 web advertisers, but it wasn’t enough to offset the group’s declining Yellow Pages business. So Yell says it’s spent the last year developing a platform that lets clients place ads not on itself but through Google’s scheme, which puts them on, partner sites and AdSense-carrying publisher sites.

Consider it an indicator to who really holds the power in local classifieds nowadays — with the once-mighty Yellow Pages reduced to giving business to the now-dominant search engine. introduced its own on-site pay-per-click ads in 2007 and recently formed an off-site ad network called netReach, but there’s still only one company that’s making the kind of online ad money Google is — and that’s Google (NSDQ: GOOG). Meanwhile, Yell is also making its fixed, year-long advertiser contracts open-ended — a no-brainer since most small businesses right now can barely see more than a couple of months ahead.

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