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This company is actually a stock we’ve had on our small cap Internet watch list of potential BAIT SHOP candidates (now the Special Situation Investing Newsletter).  We have not ever added it as an official takeover candidate because of a myriad of reasons, but that is more structural rather than situational.

We are considering opening up this watch list of candidates to our subscribers of the newsletter, although please understand that a watch list is much different than an active list of actual takeover candidates.  We do not believe that the company would instantly be acquired and an entire group of circumstances would have to come together over a staggered time frame for this to occur.

Shares of Local.com are up 8% today at $6.92, although shares have traded as high as $7.25.  Its market cap is almost $98 million and NASDAQ lists that its September short interest grew 19% from August to 2.457 million shares. 

Other key articles related to this as follows:

• Local.Com Renews With Yahoo!
• Local.Com Private Placement Holders Register Shares
• Local.com Spreads Its Wings, Acquires PremierGuide
• The patents that got it really going over summer

Jon C. Ogg
September 26, 2007

Jon Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

This is a ‘renewal’ rather than a new pact but according to the release this gives an ongoing shot of delivering additional search traffic to Yahoo’s advertisers under the sponsored search results.  Unfortunately, no terms and conditions were disclosed in the announcement.

This is too small to have any impact on Yahoo! shares, but Local.Com (LOCM) shares are up 14% to $6.77 in pre-market trading.  As a reminder, this is one of the microcap web stocks that often sees large price swings on days when it has news.

Jon C. Ogg
September 4, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

2,356,900 shares of common stock sold in a private placement transaction on July 31, 2007; and 1,037,036 shares of common stock which are issuable upon the exercise of warrants which were issued on August 1, 2007 in a private placement transaction.

These shares are from that $13 Million private placement completed only about 3 weeks ago, with the 2.3569 million shares being sold to two institutions at $5.50 per share and the rest being in warrants connected to those shares.  These warrants have higher strike prices, but this being 3 weeks into that private placement period is generally speaking far shorter than most registrations of unregistered securities from a private placement.

Shares closed at $5.09 yesterday and indications have not really been seen yet for trading today.

Jon C. Ogg
August 21, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

The company expects third quarter 2007 revenue of between $5.5 million and $5.7 million, the mid-range of which is a 10% increase over the second quarter 2007. We expect the mid-range of local search revenue to be approximately $4.8 million, an increase of 19% over the second quarter 2007. The company expects net loss for the third quarter 2007 to be between $9.2 million and $9.3 million, or $0.70 to $0.71 per share, which includes non-cash expenses of $7.4 million or $0.56 per share. The loss per share forecast assumes 13.1 million weighted average shares outstanding and guidance is based on 13.1 million weighted average shares outstanding.

It listed only $8.7 million in cash and marketable securities at the end of the quarter, but that has been bumped up recently with a $12 million net proceeds financing pact completed just last week.  Shares ar up about 2% in after-hours trading at $5.79, although it looks like shares had jumped almost 5% a few minutes ago.

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

The company has seen shares rocket up this year, but now they are back closer to levels before all the recent news came out.  Shares are down about 1% at $5.60 this morning, and the stock has a $3.05 to $13.74 trading range over the last year.  Unfortunately that $13.00 price was only briefly reached for two days in early July on new patent awards and the stock wasn’t able to hold anywhere close to it.

The stock has no options, and the actual analyst coverage is very very thin. The company posted $4.88 million in revenues last quarter and almost $3.63 million the quarter before. The July short interest was also listed as 1.79 million shares. That would be more than 20% of the float, but that was before a private placement at $5.50 per share for two institutions that raised $13 million for the company.  That $13 million was earmarked for acquisitions, sales channel development, IP, and general use.

With a lack of coverage and with a new cult stock following, the chat rooms and message boards will likely have more opinions and interpretations than anywhere else tomorrow (you are on your own there).  Either way, this one should be active in after-hours and tomorrow.  This is actually one of the few remaining microcap Internet stocks that we feel could easily be integrated into a much larger company, although the price and desire by management are more than just a mere consideration here. 

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.