When looking to broaden their online presence, local business owners can get a hand from ReachLocal. Targeting small to midsized businesses, ReachLocal offers Internet-based advertising and marketing services, including search engine marketing (for preferred placement of a company's listing on Yahoo! or Google's search results pages), marketing analytics, and display advertising. The company serves mostly US businesses through a network of locally based marketing consultants that use, among other tools, the company's proprietary technology platform to create advertising and marketing campaigns. ReachLocal was founded in 2003 and has 45 offices worldwide; it launched an initial public offering in mid-2010.
The company used the proceeds raised from its IPO (around $35 million after deducting underwriting fees and other expenses) to fund its general operations, buy out the remaining shares of its Australian operations, and invest in complementary businesses and technologies. Although ReachLocal's revenues increased by almost 44% from 2009 to 2010 ($203.1 million to $291.7 million), the company suffered a net los of $11 million for 2010, after earning $10 million in profits the year before. It cites the expenses involved in ramping up its ReachLocal Australia operations as one of the chief reasons for the loss.
ReachLocal's long-term strategy includes expanding its network of marketing consultants and offices and bolstering its offerings, primarily through expansion of its advertising capabilities and by offering its customers advertising and marketing capabilities on video and mobile formats. Along those lines, in early 2011 ReachLocal bought DealOn for around $10 million. DealOn is a local deals provider catering to 18 markets in the US, and ReachLocal plans to integrate DealOn's technology platform with its own infrastructure. A year earlier, it obtained Virginia-based SMB:LIVE, a company specializing in image management on social media and directory sites, such as Twitter and Facebook.
ReachLocal also has been moving into international markets; it recently began offering services in Australia and the United Kingdom. In early 2011, it launched an office in Berlin to cater to the German market, one of the largest concentrations of Internet users in the world.
Prior to its IPO, ReachLocal was owned by private equity firms and private investors. Since it began trading, VantagePoint Venture Partners owns about 44% of the company. Chairman Alan Salzman is affiliated with VantagePoint Venture Partners. – less