VentureBeat

Citysearch, the division of IAC focuses on local reviews of restaurants and other services, has acquired the struggling local review start-up, Insider Pages.

The purchase (amount undisclosed) comes at a time of increasing competition in the race to deliver a compelling local search services. Citysearch’s parent, IAC, has already bolstered its local search offerings, namely with Ask City, a property that packages everything from local search to local maps, reviews, and ticket services.

However, more entrants have arrived to nip traffic away from Citysearch, an early player that has seen its traffic stagnate in recent months. There’s Yelp, Judysbook and Backfence, for starters. Earlier today, we mentioned new competitor Outside.in, another company going after the local community news and events area.

Anne Raimondi, vice president of marketing at Redwood City’s Insider Pages, just informed VentureBeat of the purchase, which will be announced tomorrow. We mentioned the rumor last week.

Insider Pages has about 600,000 user reviews, and they’ll be integrated into the Citysearch’s offering, she said. It has 2.5 million monthly unique readers, she said, based on Comscore and internal tracking numbers.

She would not say whether the purchase price was more than $10 million invested in the company by Sequoia Capital, Softbank and Idealab. She said there were multiple bidders, but that Insider Pages preferred Citysearch because it is complementary. Insider Pages is popular among suburban parents and homeowners, she said, giving it strength in the home, garden, health and plumber review areas. Citysearch is stronger in bars, arts and entertainment. Citysearch will absorb Insider Page employees in its San Francisco office.

(Updated, rumor that Backfence is shutting down is wrong, see fresh post here)

Roelof Botha is one of the hotter venture capitalists these days. The Sequoia Capital venture capitalist led that firm’s investment into video-sharing site YouTube — and saw that company sold within a year to Google for $1.65 billion.

Now he’s apparently reviewing the progress of his companies. Palo Alto’s Meebo, the site that lets people use integrate their instant messaging service online, has been out raising money for a while. One investor told us he was shut out from investing, suggesting Meebo is doing fine. Not hearing anything, we looked up chief executive Seth Sternberg. He says Meebo will raise the second round this quarter. So apparently Meebo is being given more time to figure out how to make cash — a nice counter-story to the current pain.

Botha also invested in Redwood City, Calif.’s Insider Pages, a site where users can go and share local reviews on everything from restaurants to doctors. Rumors are that it has laid off two-third of its staff, and we’ve messaged the company to see if it is true. Insider Pages competes with a growing number of community review oriented sites, including Yelp, Judy’s Book, Smalltown and BackFence.

The company has raised $10 million from Sequoia, Softbank and Idealab, and only last year moved to Redwood City from Pasadena.

Here’s a a graphic (scroll to bottom) showing a market matrix of local sites, including Insider Pages (with Smalltown putting itself at the sweet-spot, since it is Smalltown’s graphic). In reality, they all overlap significantly.

[Update II: We hear from a source that Backfence CEO is resigning and 12 of 18 people have been laid off, and the company is closing. We've put in calls to the company. No one answered when we called their Virginia office, 11am their time. Until confirmation, we'll keep this in rumor category. Update III: Something is definitely up. Even someone we know well there is declining comment. Update IV: Layoffs confirmed, but it is staying open. Fresh post coming shortly ]

In other Web 2.0 news, Tagworld doesn’t appear to be doing too well. The Los Angeles social networking company has taken down its management page. We’ve messaged the company, to find out more. Draper Fisher Jurvetson invested $7.5 million into the company. [Update II: On the contrary, someone very close to the company tells VentureBeat the company got a "huge investment" last month from a well-known company]

Meanwhile, more executives are leaving video site Guba, as it looks for a buyer. And another exec has left Wallop, another social networking site.

[In other Sequoia news, the firm has taken down the picture of Elon Musk, a co-founder of Pay Pal from its homepage, where the firm showcases some of its successes. This is apparently a response to Valleywag, which pointed out how Musk was the only one of the PayPal founders pictured -- and noting how other early players such as Max Levchin and Peter Thiel weren't represented. There are big differences among the founders about who should take credit for PayPal's early years, and so Sequoia -- prudently perhaps -- decided to dodge the issue, rather than further endanger its already frosty relationship with Thiel.]

See our earlier Q&A with Botha here.

Yelp, the Web site offering user-generated reviews of bars, restaurants and other places, has raised $10 million in venture capital from Benchmark Capital.

We recently mentioned Yelp’s wave-making with its parties.

Yelp, like other recent Internet companies, is challenging incumbent sites like Citysearch by developing a community of local reviewers. By encouraging loyalist users to review often, Yelp bets its site will be fresher and more compelling.

It is noteworthy that the venture money comes from Peter Fenton at Benchmark. We recently featured Fenton’s argument that companies should only get funding after they’ve achieved some traction with customers. Yelp had 1.5 million unique users in September, a 200 percent increase from January, the company says. So it fits in the “post-adoption” category, Fenton told us today.

Fenton will join Yelp’s board.

After launching initially in SF, the SF-based Yelp has since launched in Boston, Chicago, Los Angeles, New York, San Jose and Seattle.

Yelp’s other investors include Bessemer Venture Partners and PayPal Co-Founder Max Levchin.

Rather than unleashing armies of people to go out and build a massive repository of reviews, like Citysearch did, Yelp has managed to build a local community that keeps reviews fresh, giving Yelp a more lively feel, says Fenton. And with more reviews, you can begin to parse them in different ways — for example classifying them to show which one are written by 20-year-olds, and which ones by 40-year-olds. That way, users can judge reviews based on their preferences.

Fenton said he made the decision to invest after talking with several locales, including Quince, a restaurant in San Francisco. He asked the waitress if she’d heard of Yelp. “Have I heard of Yelp?,” she asked. “I obsess about Yelp.” Fenton said she described in detail a negative review, and remembered the date the customer visited, and what went wrong that evening.

Fenton says $14 billion is spent each year on yellow page advertising every year in the U.S., and that he Yelp can make money by getting advertising on its sites from local establishments. Yelp is not yet making money.

The company had raised $6 million previously.

When asked about the girl-kissing-girl photos appearing from a recent Yelp party, chief executive Jeremy Stoppelman said the actions weren’t staged, and that the photographs underscore the “festivities and celebration and excitement going on in the valley” right now. The parties help to drive Yelp’s community building, he said.

Besides Citysearch and Yahoo Local, there are also new competitors like Judy’s Book and Insider Pages. Stoppelman said that the relative depth of Yelp’s community is what encouraged Benchmark to invest.