Investing
Local.com Spreads Its Wings, Acquires PremierGuide (LOCM)
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Local.com (NASDAQ:LOCM) has been a crazy stock this year with a trading range of $3.05 to $13.74, and has been a bit of a cult stock because of its narrow local scope in search for many things in metro areas. Shares are up 4% pre-market on news that the company is acquiring PremierGuide, a provider of online business directories to regional media publishers such as newspapers, TV and radio stations, and city portals. If the company can integrate and execute this, it could give it a leg up over Local’s current model.
The acquisition price is said to be $2 million for 100% of the company. PremierGuide’s unaudited revenue was approximately $800,000 for the last twelve months with net income of approximately $300,000 excluding salaries paid to founders. PremierGuide launched in 2003, and its CEO Malcom Lewis, will become Local.com’s vice president of private label. The company says this will make Local.com one of the largest syndicated private-label local search and directories with a network of over 400 regional media websites. Premier has directories on over 350 sites including Community Newspaper Holdings, Inc., GateHouse Media, Inc. and Washington Post. Local.com claims 10 million visitors per month already.
This will integrate into LocalConnect, which allows local newspapers, radio and television stations and yellow pages companies to incorporate Local.com’s local search technology into their websites via a customized, private label local business directory platform.
Interestingly enough, if you think the company can achieve its goal you could make the argument that because this has a media focus Local.com could have just integrated a business that could act as an instant secondary or tertiary PR machine since local media could end up saying "Powered by Local.com." That is assuming the company does actually have its name front and center, and how successful that is will depend upon its ability to secure that in its private-label agreements.
Jon C. Ogg
July 19, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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