Today, Yell announced its acquisition of Moonfruit, a United Kingdom DIY website and online shop builder, for approximately GBP 18 million, funded out of Yell’s cash reserves. Retention bonuses of up to GBP 5.2 million will be paid to key members of Moonfruit management after two years, provided that they remain exclusively employed by Yell. The acquisition is part of Yell’s transformation strategy from an SME online advertising provider to become a leader in the emerging local eMarketplace.

The eMarketplace is a platform and digital portal where both consumers and SMEs can make connections and transactions. Moonfruit will assist Yell in enhancing its ability to provide websites, mobile sites and basic commerce services to SMEs. Earlier in the year, we noted that Yell clients have an ongoing interest in digital services. Its Q1 2012 results saw an 11 percent growth in the digital services offering. In addition, the deal also complements Yell’s acquisition of multi-store e-commerce company Znode last year. While Znode provides SME with enterprise opportunities through its e-commerce platform, Moonfruit offers them light commerce services. The lighter offerings are for SMEs that have a smaller number of products.

Moonfruit launched in the U.K. 12 years ago as a platform to make the Web more accessible for local businesses and consumers. When a customer builds a Moonfruit site, he or she can also add a commerce option, a mobile presence, and build a Facebook store from the same platform. About 5 million websites and 230,000 online shops in the U.K. and U.S. use Moonfruit technology. Updated HTML 5 versions of their sites that build on their existing HTML 5 mobile and Facebook versions will be launched later this year.