Marchex (MM) (NASDAQ:MCHXP)
Historical Stock Chart
From Jul 2019 to Jul 2024
Marchex, Inc. (NASDAQ:MCHX) (NASDAQ:MCHXP), a local online
advertising company and leading publisher of local content, today
announced that it has entered into an agreement to acquire VoiceStar,
one of the largest providers of call-based advertising services,
including pay-per-phone-call and call-tracking, for local advertisers.
The acquisition of VoiceStar gives Marchex a clear leadership position
in local online advertising by adding call-based services to its local
online advertising platform, making it one of the most comprehensive
offerings available, and expanding Marchex’s
base of local advertisers and large aggregators.
Marchex total anticipated investment to acquire VoiceStar will be $28
million, consisting of approximately $20 million in transaction
consideration and $8 million in company investment. Specifically,
transaction consideration consists of approximately $12.9 million in
cash consideration and Marchex will issue approximately $7.1 million in
restricted stock that is subject to vesting over two-and-one-half years
from closing to certain employees of VoiceStar; and company investment
consists of $8 million relating to products, infrastructure, human
resources and other items through 2008. The acquisition is expected to
close by October 1, 2007. VoiceStar will continue to operate from its
headquarters in Philadelphia, PA.
"With the addition of VoiceStar, Marchex offers one of the most
comprehensive online advertising platforms and agency services for local
advertisers at scale in the industry. We can now offer local aggregators
a private label search- and call-based marketing platform with
distribution for their advertisements in search engines, vertical Web
sites, and on our network of local Web sites," said Peter
Christothoulou, Marchex Chief Strategy Officer. “Additionally,
we can now also add proprietary pay-per-phone-call advertising units to
our network of local Web sites, which allows us to increase the direct
monetization of our own properties.”
"We are very excited to be joining forces and bringing the value of our
combined assets to a greater audience," said Todd Lieberman, VoiceStar
CEO. “We share Marchex’s
vision for unlocking growth opportunities in the local space and look
forward to being a part of the innovative solutions Marchex brings to
the marketplace.”
In addition to enabling Marchex to offer one of the most comprehensive
local advertising platforms in the industry, the VoiceStar acquisition
adds more than 100 local advertiser aggregators, including Comcast, The
Cobalt Group, and YellowBook USA to Marchex’s
current partner roster which already includes AT&T and Yellowpages.com.
VoiceStar also increases Marchex’s ability to
directly monetize its proprietary network of Web Sites, lessening its
dependence on third-parties and increasing the revenue yield from its
Web sites through the utilization of call-based advertising units which
tend to have higher rates then pay-per-click listings.
Pay-Per-Phone-Call Offers Significant
Growth Opportunities:
In addition to the growth opportunity associated with the
pay-per-phone-call market which the Kelsey Group estimates will reach up
to $4 billion by 2009, Marchex believes that providing advertisers with
call-based advertising options, in addition to search-based marketing
tools, is a prerequisite to success in the local advertising channel.
According to Piper Jaffray, only 42% of the estimated 20 million small-
to medium-sized businesses (SMBs) in the U.S. have Web sites and many
others are still are at the early stages of online marketing. As a
result, call-based advertising will continue to be a priority for local
advertisers, further evidenced by a recent Kelsey Group survey reporting
that 71% of local advertisers would rather pay for phone calls versus
clicks.
“We believe that call-based online advertising
is not only a key extension of local search, but is also an important
driver to close the gap between the vast number of consumers searching
locally and the small percentage of local businesses currently
advertising online,” said John Keister,
Marchex President and Chief Operating Officer. “Phone
calls have been, and will continue to be, a predominant way in which
consumers connect with small businesses. Providers that deliver both
search- and call-based solutions will be in a tremendous position to
expose online advertising to the millions of SMBs who are not yet online.”
VoiceStar’s technology generates custom,
trackable phone numbers for advertisers. Whenever an advertiser’s
phone number is dialed by a consumer who sees a relevant advertisement
(online or offline), the calls are routed through VoiceStar’s
servers to the advertiser. From that point, the call is tracked,
monitored, recorded and billed. The technology supports multiple
advertiser implementations, including: click-to-call, Web form-to-phone
and other call-based products.
The combination of VoiceStar’s call-based
offerings and technology with Marchex’s
search-based offerings delivered through Marchex Connect, Marchex’s
local online advertising platform, provides significant benefits for
local advertisers and aggregators as well as national advertisers.
Aggregators will now have expanded integrated search- and call-based
offerings to present to their large base of local advertisers. In
addition, national advertisers will increasingly benefit from integrated
search- and call-based options from Marchex by enabling them to better
target their ads locally and more effectively measure the offline
revenue driven from their online marketing using call-tracking.
Marchex Updated Financial Guidance:
The VoiceStar transaction has the following anticipated financial impact
to Marchex.
1. While Marchex will only recognize a partial year contribution from
VoiceStar, it believes that VoiceStar will generate revenue of
approximately $1.5 million for the full year 2007, with an operating
income loss. Revenue contribution to Marchex from VoiceStar for the
remainder of 2007 is anticipated to be $0.5 million. Additionally, based
on current VoiceStar growth rates, Marchex anticipates that VoiceStar’s
2008 contribution will more than double its total anticipated 2007
revenue, excluding cross-selling opportunities with Marchex.
2. Marchex expects that investment in VoiceStar and various call-related
opportunities will total $3 million in 2007 and $5 million in 2008. The
investment will primarily be directed toward: (i) increased
infrastructure, communications platform investments, and investments in
technology and development to drive integration into Marchex and launch
marketplace systems (pay-per-phone-call system for syndication across
relevant proprietary and third party Web sites); (ii) Marchex partner
support; (iii) increased sales, marketing and business development
initiatives; (iv) increased intellectual property development, (v)
increased personnel costs; and (vi) increased expenses to support Marchex’s
public company requirements.
About Marchex, Inc.
Marchex (www.marchex.com) is a
local online advertising company and leading publisher of local content.
Marchex's innovative advertising platform delivers search marketing
products and services for local and national advertisers. Marchex's
local content network, one of the largest online, helps consumers make
better, more informed local decisions though its network of content-rich
Web sites that reach tens of millions of unique visitors each month.
Forward looking statements:
This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release regarding
our strategy, future operations, future financial position, future
revenues, projected costs, prospects, plans and objectives of management
are forward-looking statements. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements
and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the
plans, intentions and expectations disclosed in the forward-looking
statements we make. There are a number of important factors that could
cause Marchex's actual results to differ materially from those indicated
by such forward-looking statements which are described in the "Risk
Factors" section of our most recent periodic report and registration
statement filed with the SEC. In addition, Marchex's acquisition of
VoiceStar remains subject to customary closing conditions.
KEYWORDS: Search Marketing Online Advertising Search Engines
Shopping Search Local Search