VentureBeat

mathew johnson said:

I’m fairly certain that throwing $55M down the cold-calling locksmiths rathole doesn’t fulfill any reasonable definition of fiduciary responsibility.

I’m not saying you can’t make a business out of local online yellowpages sales, I am saying that you can’t make a venture return on $55M. Fail.

A. Smith said:

I agree with Mathew here, this is an irrational business play - technology looking for a problem to solve.

Tom Tsinas said:

Agreed! It’s a losing battle. Ironically, this announcement comes on the same day the Yellow Pages Group in Canada partners with Google to resell AdWords.

May said:

I am a premise sales rep with over 17 years experience working for the largest Yellow Pages publisher in the world. I would have to say ReachLoca’s business model is one that does offer a very attractive competitive advantage.

Just because Goliath has a huge sales force does not mean the sales force can offer what small/medium size businesses really want : clear and measurable tracking results, solid ROI on each and every account.

With the right salesforce, ReachLocal can stand up to the big boys!

Brandon said:

They claim to have a patent-pending method of tracking calls made to a business when Local Launch, recently purchased by R.H. Donnelley, is already doing that and their sales reps already have the relationships built with the local business owners and can provide the solution to print, IYP, & SEM all from the same point of contact which saves time and money for the business owner.

Reach Local will put their “SPIN” on this, but that’s exactly all it will be…..”SPIN”

Adam said:

I have been in the yellow page industry for some time now and beleive that our print product is and will be superior to any online local search method for the next few years. Local search is becoming more and more popular and more used throughout the world. I don’ think that the yellow page industry will disappear anytime in the near future, but they will be hurt by local search. To avoid this, RH Donneley has teamed with local launch and provides a far superior product than reach local could dream of. In addition to teaming with local launch Donneley is also the leader in online yellow pages with dexknows.com (previously known as dexonline.com). This gives Donneley a huge advantage in the market place because they can offer print, local search and online yellow pages to each of their customers. I would love to work for RH Donneley if they were in my market for the mere fact that I could work for the leader in the industry and not have to worry as much about the competitors because I could offer my customers anything they feel they might need. RH Donneley please come to California!

Gus S. said:

Anyone investing in these channels should go out and speak with small business’ to discuss the results they are getting. Many more business are seeing poor results than are getting solid returns. Putting 55 million into a business that is built on the position that they are going to go and try and “cream” the YP customer base and get the easy money from businesses that is aggressive in advertising. Long term, the business will only last by getting far past these customers into the hard earned smaller/stodgier businesses.

They have nothing but an up hill battle in front of them. The beginning is the easist, slaes will only get harder as they go deeper.

Cookie said:

What Reach Local fails to realize is that local yellow page companies and their reps have spent over 100 years establishing relationships. Being the sexy new internet company in town is no replacement for an established relationship. Local yellow page reps, and CMRs as well, have been well trained on local search. You put the relationship on top of the training - and you have success. Reach Local is setting their investors up for a fall.

Beaver said:

R.H. Donnelley didn’t just team with Local Launch, they own it…..

ACT71 said:

I hear a lot of people mentioning that the YP companies have built relationships with SMB’s but at the end of the day a better product with solid ROI and knowledgeable “internet” reps wins out over a print salesperson trying to sell some clicks as an add on to their 60% margin print product. The fact that a company has been around longer doesn’t automatically translate into a better product.

Ken Bradley said:

Hello, I’m Ken Bradley one of the founding members of NetYellOO and we like to know your feedback on the concept of our future site that we’re going to launch. We like for you to let us know what you think about our approach to connecting with local advertisers and what you as a consumer would like from a site like this.

NetYellOO would like to bring a new approach to what local online advertising should look like and be. Our approach is to give a little to gain a lot, which in advertising it’s been mostly about taking a lot and giving very little.

We also have taken a new approach to funding our site, and if you think that this approach might work, we like to know. Of course we believe it will, which is why we have taken it. But we care what others think and like to see if others agree with our approach or has a even better suggestion.

Also we believe any feedback that we receive would help and benefit NetYellOO going forward to creating a very useful and great site. Do we believe that we can compete with a Google or Yahoo? absolutely or we wouldn’t be in this game. We are playing to win and we intend to hold our own. To us to search whether for a business or for information, it’s still a search.

NetYellOO intends to be THE LEADER when it comes to searching for LOCAL businesses,restaurants,used or new cars, renting an apartment or buying a new home or simply what’s going on in your local area. If we can make it easier for buyers and sellers to get together then we will have have accomplished our goal.Better yet if we have made friends and contacts along the way.

Well we hope to hear from you and you’ll become a user of our site when we officially launch, and if you have any comments,suggestions or feedback please email us them.

Thank you,

Ken Bradley

Howard Scott said:

Question -

So you believe that no research went in to the decision to invest $55 million. Sarcasm aside, people don’t just dump that kind of money in to a business for a tax write-off.
Perhaps there’s more to this story, I have no vested interest in this company.

Jenn said:

I have to comment after reading all of these posts about YP, IYP, RH Donnelly, and the competition. I have worked for RH Donnelley which had gone through 3 aquisitions in my area (NY) back in 1999-2003. When IYP & online advertising started to really make a presence selling print ads were getting harder to sell. Harder for reps to make quota and I was the top rep in my area for 2 years.
I dont think print ads will go away but they are diminishing and SEM, IYP are the way to go now. Just my opinion.

JC Blogs: I'd bet heavily on ReachLocal said:

I currently sell print and a lot of it. As our economy tightens, more and more of our advertisers are calling us on the carpet in regard to ROI. Local print (magazines, direct mail etc, not newspapers) and print yp still deliver, but are rapidly becoming commodotitized in the face of increased competetion in this space.

What everyone seems to be forgetting is that local advertisers are often in business in spite of themselves, have little or no marketing experience and rely on local ad reps for guidance. Most are used to hearing the same old song and dance from everyone through their door and are fed up. They continue to buy only for lack of better options. They would love to be able to quantify their results and wrap their collective brains around their marketing initiatives. However, most cannot begin to accurately determine from where their business comes. They’ll tell you they can, but it’s a crapshoot at best.

Years ago I sold yp when yp reps were widely regarded as the best trained, best closers in the industry. This is no longer true. In fact, the reps I now come across are either fresh-outs or dinosaurs. The fresh-outs seriously lack sales ability and the dinosaurs the ability to change. For any directory publisher to successfully migrate revenue to the web will be a monumental task in the absence of a highly-trained, effective salesforce. The company that will win SMB market share is the one whom will bring excitement, enthusiasm, hope, value and measurable results. Companies such as ReachLocal have a far better chance of pulling it off as they are streamlined and focused in their strategy, appear to be building a gigantic sales force, and have a solution with a strong value proposition. What’s more is that the value and ROI are demonstrable. SEM companies may not immediately grab the lion’s share of local ad budgets, but are perfectly positioned to if they under-promise, over-deliver and build trust and relationships as ad dollars migrate to the internet. My bet is on ReachLocal and companies like it. I can only imagine what will happen to Google and Yahoo’s stock as these sem companies push even more revenue their way.

chrobrego said:

Reachlocal doesn’t have a clue. I’ve found their salespeople to be very uninformed and unprofessional. Just another seo company with delusions of grandeur because they got some venture capital money that they are spending like mad. Don’t waste your time or money on this pig.

Gary Gonzales said:

I’ve read through a few of these posts and feel compelled to state our firm’s experience with Reach Local. Rather than force the reader to review this entire posting let me start by getting to the bottom line, I would not recommend Reach Local for anyone wishing to generate sales leads or actual revenue.

Our initial thought was to outsource our PPC campaign; we felt this wasn’t our core competency and Reach Local would do a better job than we had. We did our standard due diligence for any 3rd party supplier and also interviewed their representatives in our office asking questions like:

Question: Could Reach Local’s reverse proxy support replicating SSL encryption?
Answer: Yes, that’s not a problem.
Reality: It took almost 2 months before this issue was resolved; ultimately Reach Local accomplished this task by using their own certificate to support the proxied SSL page.

Question: Would Reach Local be doing anything to negatively affect our hard earned organic PR?
Answer: No, Reach Local will not have any affect on page ranking.
Reality: Reach Local submitted their proxy site to Yahoo and our original site’s ranking dropped from #2 to #50 and I have spent a considerable amount of time getting us back on the first page at #8 and made Reach Local retract their proxy. Why they would even think to submit their proxied site to populate the organic section of any search engine still remains inexplicable to us.

Question: How many leads should we expect to reasonably get?
Answer: Reach Local presented us with a projection which stated we should expect to receive a minimum of 40 leads which could be directly attributed to them using their tracking tool. This was based on their market analysis with others offering similar services.
Reality: The first month Reach Local took over the campaign we received two leads neither of which was viable because Reach Local failed to implement the initial key words we had requested (see below). Moreover historically we could depend on 5 revenue generating leads from our web site and this all dried up as soon as Reach Local began to mismanage our campaign. The result was several phone calls and face-to-face meetings with our Reach Local representative to get us back on the right path 2 1/2 months into our 4 month campaign. We attempted to hold Reach Local accountable for the expectation they had set of 40 leads but were ultimately told by their representative these weren’t “real numbers” and if that was our expectation we should consider terminating the relationship, which we would have done except that this also meant abandoning our contractually obligated funding.

Question: Could we provide them with initial key words to avoid/facilitate their algorithms learning curve?
Answer: Absolutely, just e-mail those to us.
Reality: Two months after Reach Local took over the campaign their representative admitted that he failed to follow through on our request and never implemented our baseline keywords. He could not offer any explanation as to why this had occurred stating only that he was “sorry”.

At the end of the day our expectations went from expecting to see new revenue to desperately trying to maintain the original status quo. It was so bad that we just wanted our traffic to be what it was before Reach Local took over our campaign. What was more disturbing was our Reach Local account rep’s attempt to blame the poor performance on our website. This poorly thought through logic crumbled when we pointed out that it was a little late in the game to point to perceived deficiencies with our website. These concerns should have been mentioned before Reach Local set the expectation of 40 leads. Also, our website was already generating 5 leads per month so how can anyone reconcile this ludicrous statement…at minimum this should have been maintained not driven into the negative.

Suffice it to say we will not be renewing our contract with Reach Local. We’re going to shift our focus to organic and maintain our own PPC campaign…turns out; by comparison, we were the experts after all. I have a local guy that does reasonably priced SEO…we’re going to set an implementation plan in place to reach short terms goals ultimately culminating in something long term. We re-learned a hard lesson…in business there are no easy shortcuts. These guys sold us “magic beans”, do yourself a favor and don’t fall into the same trap. The real shame of it is that I still believe their technologies to be viable, but their support and representative have no clue whatsoever. At the end of the day technology is just an enabler; if your people aren’t competent then I don’t care how great your systems are.