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As the name implies, Local.com (NASDAQ: LOCM) is a provider of local online advertising services -- primarily for small business. And based on its Q1 results, the company continues to get traction. Revenues came to $11.1 million, up 16% over the past year. There was a net loss of $2.9 million or 20 cents, but the company was able to post positive cash flow.
In the quarter, search traffic reached 60 million monthly unique visitors (from both network sites and Local.com). This represented an 18% increase over Q4 and 32% spike over the past year. True, revenue per thousand visitors was down 11% to $246, but this is to be expected in the slow economic environment.
Actually, Local.com is using its cash to pick up customer bases. For example, last month the company acquired 14,200 local business customers for $3.1 million. There was also a purchase of 11,800 web hosting customers in February (for $1.2 million).
In all, Local.com has 30,000 subscribers to its small business service offerings.
No doubt, expect more M&A activity over the year -- which will certainly help build more critical mass.
For the most part, local online advertising is still in the early stages. But, the fact remains that traditional yellow pages adverting is quickly dying -- and some of the dollars are shifting online. So, Local.com should be a beneficiary of this big trend and is making the right investments to capitalize on things.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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