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.

ENCINO, Calif. (April 5, 2005) - 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), Internet Yellow Pages companies (SuperPages.com), 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.

About ReachLocal

ReachLocal (www.ReachLocal.com) uses local search to bring Internet marketing within reach of every business, dramatically easing the process of finding customers online. Its proprietary, patent-pending advertising platform gives local businesses prominent placement on leading search engines, including Google and Yahoo!, along with online Yellow Pages companies and other popular commercial listings while limiting the display of the ads to only those people who live within specific geographic areas. ReachLocal is a Local Match Ambassador with Yahoo! and a Qualified Google AdWords Professional. Based in Encino, Calif., ReachLocal utilizes a nationwide network of independent sales agents to serve a diverse client base that includes auto dealers, dentists, home improvement companies, real estate agents, attorneys, travel agents and more.

About VantagePoint Venture Partners

VantagePoint Venture Partners is among the most active and successful venture firms in the world with more than $2.8 billion of capital under management. The Firm invests exclusively in technology driven companies and is organized around deep expertise and resources in five principal areas of interest: Semiconductors, Software and Internet, Communications and Systems, Healthcare, and CleanTech. VantagePoint is a multi-stage investor, investing in high growth businesses at all stages of development. The Firm believes in applying an active, hands-on and team oriented approach to businesses not only at the traditional early stage, but throughout a company's progression to scale. The Firm supports each of its portfolio companies with the resources of a dedicated team of VantagePoint professionals able to contribute a blend of company building, technology, operations, marketing, and corporate finance expertise. For more information, www.vpvp.com.

Contact:

Ken Greenberg
Edge Communications, Inc.
818-719-9292
ken@edgepress.com