Montreal Tech Watch

YellowMedia announced today the sale of small ads site LesPac to Montreal media company Mediagrif, for $72.5m. The sale comes 2 weeks after the company announced a 2.8 billion $ loss, and heavy debts plaguing the company, as it faces problems to transform itself to an online media play. The CFO resigned, and the heavy financial pressure certainly pushed Yellow Media to divest itself from LesPac.

The property in itself is well established throughout Quebec, and had strong growth in the past years. It has a heavy focus on premium ads, such as real-estate, automobile and jobs, while one of its direct competitors kijiji.ca is known for its consumer focus. Both have gained though from the transition of print to online, and most people who is selling valuable property will advertise on the two sites.

Mediagrif Technologies, specialized on online niche marketplaces connecting businesses, had certainly an interest in LesPac’s focus on premium offerings. It’s a market they know well, and they can easily transfer know-how from their other successful properties, add business communications tools and other expertise to the mix. For Yellow Media, apart from the cash they receive from the deal, it’s a loss though, since LesPac was one of their best properties on the market, a popular site that was a leader on the market. It’s understandable though they had to get relief from the financial pressure. They do retain the advertising deals and partnerships though, so it’s not a entire loss. It should also get them to focus more on yellowpages.com, Mediative, and redflagdeals.