ReachLocal Receives $7.75 Million Venture Capital Investment, Led by VantagePoint Venture Partners

Local search technology has opened the door wide for local businesses to use the Internet to attract new customers

As local search grabs the spotlight within the Internet search marketplace, ReachLocal (www.reachlocal.com) announced today that the company has concluded a $7.75 million round of venture capital funding, led by VantagePoint Venture Partners of San Bruno, Calif. The investment round will support ReachLocal's proprietary Internet marketing platform, which enlists popular search engines to help local businesses advertise and market themselves online, in a turnkey fashion.

Formally unveiled in February, the ReachLocal platform already is helping companies in a variety of industries across the country find new customers online and expand their businesses. Initial response among local advertisers indicates that many have begun to divert to ReachLocal dollars normally spent on traditional offline advertising vehicles, most notably the Yellow Pages.

According to industry estimates, the market opportunity for local search is enormous. Local businesses in America spend $100 billion annually on advertising targeting local or regional audiences, but only about three percent of that advertising has migrated online. With Kelsey-Bizrate estimating that 25 percent of Internet searches are local in nature meaning local consumers are looking for local merchants neighborhood businesses realize they need to be online.

ReachLocal provides an innovative solution, helping local businesses that have yet to tap the Internet as an advertising medium get online easily and profitably,. said David Carlick, Managing Director, VantagePoint Venture Partners. This sector is strong and poised for aggressive growth, the company is managed by a team of industry veterans with multiple Internet successes already under their belts, and the business model by which they.re bringing their product to market is strategic and creative. We're confident in our investment in ReachLocal.

This investment is a powerful vote of confidence in the ReachLocal solution, said Zorik Gordon, president and CEO, ReachLocal. There's a huge gap between the marketing opportunities online and how much money local businesses currently are spending - or not spending for Internet advertising. Our solution helps bridge that gap, and we expect it to help move billions of local advertising dollars online. This trend is in its early stages, and we're positioned to capture a significant chunk of that business with our patent-pending approach.

Securing this financial support from a respected company like VantagePoint is a milestone achievement for us and, we trust, for local businesses as well, Gordon said. ReachLocal will use the proceeds to support its ongoing product development efforts, and to continue to build out its unique sales agent model, to deliver the ReachLocal solution to local businesses around the country.

ReachLocal is bringing its platform to market by developing a nationwide network of independent sales agents who market the solution at the grassroots level. Many already have their own client base of local businesses, and ReachLocal is working with independent agents to incorporate its solution into their existing campaigns to help drive online customers to their clients.

Through its proprietary platform, ReachLocal enables smaller, independent businesses which often don't have the time or resources to manage an online marketing presence to immediately start advertising their products and services online via the most popular local search vehicles. Currently ReachLocal is working with the Internet.s leading pay-per-click search engine providers (Google, Yahoo), paid inclusion providers (Yahoo!) and geo-targeted banner networks (Advertising.com).

The venture funding arrives just as smaller, local businesses are discovering that the global nature of the Internet and the complexities involved in online advertising don't have to be deterrents. ReachLocal addresses the most common challenges to online advertising managing the complex process of search engine keyword bidding, targeting by geographic region and providing detailed tracking to accurately measure ROI bringing Internet marketing within reach of every business.

Contact:
David Glaubke,
Director of Corporate Communications
ReachLocal, Inc.
(818)936-9908
dglaubke@reachlocal.com