ReachLocal – Profile
HQ: Encino, CA
Management: CEO is Zorik Gordon who previously ran WorldWinner, a prize-based site for online games. He also founded Jackpot.com with Idealab which became Vendare. Clearly, this guy understands how Internet traffic works. Most of the team came from WorldWinner.
Investors: In April 2005, ReachLocal raised $7.75M led by VantagePoint Venture Partners.
Business Model: ReachLocal is a glorified Search Engine Optimization (SEO) company. There are hundreds of these shops out there, but ReachLocal smartly packages itself as an expert on local markets. ReachLocal partners with local SEO companies to get small local businesses such as dentists or car dealers as clients, then buys keyword-based online ads for these companies on Yahoo, Google, Yellowpages.com, and other networks. The biggest value-add ReachLocal might provide is metrics reports for small companies, which many SEO companies would probably not go to the trouble of doing.
Competitors: Leads.com, LocalLaunch, Localtising.
Dirt: Because this company falls into the category of localized ads/search, it stands to benefit from the current renewal of interest in the “verticalization” of search – and in locally targeted ad models. As we’ve noted beofre, the promise of localilzed advertising was actually one of the hottest areas of interest when the commercial Internet first came into existence. Back then, the paradigm was the yellow pages – and how to make them searchable. Companies like the long-since defunct BigBook recognized that there was a business here, but were too early to the game and didn’t really have the right model. Nearly 10 years later, we suspect ReachLocal has a better idea of how to make this business work.