Canada’s Yellow Pages Group announced this morning that it will expand its relationship with Google to become the first Canadian-based reseller of Google AdWords. This is a significant escalation of YPG’s relationship with Google, which basically involved sharing content with Google in exchange for the enhanced exposure the arrangement provided YPG’s online customers. Now, YPG will add Google inventory to the sales bag of its roughly 900 sales reps. Currently, YPG has about 425,000 total advertisers.

From the press release:

Under the agreement, YPG will be able to provide its approximately 425,000 advertisers an enhanced advertising offering designed to help small and medium-sized businesses further market their businesses online. In addition to their existing advertisements on YellowPages.ca™ or Canadaplus.ca™, YPG’s network of seven local city sites, YPG advertisers will now have the opportunity to reach potential buyers with Google AdWords. The Google AdWords advertising program allows advertisers to display advertisements alongside search results when users search for local information on Google and Google Maps.

Here is a copy of the full announcement.

Update: This afternoon I caught up with JP Lion, VP of Marketing at YPG, who gave a little color on the deal.

This deal is part of a progression of agreements between Google and YPG, starting with a simple distribution deal and leading to this reseller agreement.

All of YPG’s sales reps are being trained on Ad Words, and it will be offered on a budget based model. The training is just getting underway, and the first ads are expected to be served in Q2 2008.

JP says the decision to go with a combined print-online sales force will pay off with this deal, as the sales channel has acquired a measure of web savvy that will pay off as the channel takes on Ad Words.