Within Reach

By Booyeon Lee
October 15, 2007

Ever wondered why your local dentist doesn't advertise on Google?

It's because algorithms are complicated. Small businesses don't have the time, knowledge or resources to find customers online.

Enter Woodland Hills-based ReachLocal Inc., digital advertising company. They find customers online for local plastic surgeons, lawyers or certified public accountants by taking their advertising budget — ranging from $100 to $1,000 — and helping them spend it online.

ReachLocal's algorithms then run automated contextual advertising campaigns on Google, Yahoo, MSN and Verizon Superpages.

"We realized though that these doctors, plastic surgeons and lawyers don't care about clicks. What they care about is phone calls," said Zorik Gordon, the company's chief executive.

ReachLocal has a patent-pending technology that allows it to track how many phone calls were made through its online advertisement. When a potential customer clicks on the advertisement link, ReachLocal's server replaces the advertiser's phone number with its own, which then routes the call back to the advertiser. This allows the company to track how many phone calls were generated from the advertising campaign.

Last week, ReachLocal got an additional $55 million in venture funding, led by Rho Ventures. This brings the 4-year-old company's backing up to $67.9 million.

Zorik said the company will expand aggressively and hopes to open an office in major cities across the nation.

The company has 300 employees, including 50 in LA, and has conducted 100,000 advertising campaigns so far.