Local.com acquires online marketing start-up Octane360
Irvine-based Internet search engine Local.com Corp. said Thursday that it had acquired Octane360, a Los Angeles technology start-up that specializes in online marketing for small businesses and Web domain owners.
Local.com said it paid $5 million in cash and stock for Octane360, with up to $5.9 million in additional cash if certain performance criteria are met in the two years after the deal’s close.
Local.com provides a Web directory of about 14 million local businesses and offers geo-location services that connect consumers with businesses in their immediate area. With the service, users who want to find bouillabaisse near Echo Park, for example, could plug in “French restaurant” and the desired ZIP Code. The site — which receives 20 million hits a month — would then provide a list of nearby French eateries.
The website attracts traffic by utilizing big-name rivals such as Google Inc. or Yahoo Inc. and advertising on their search engines. Local.com generated 57% of its Web traffic through marketing campaigns on other search engines in 2009. Close to 70% of the firm’s advertising budget last year, or $17.9 million, was spent on Google alone.
Octane360 is a technology platform that allows users to find, buy and create basic content for Internet domains that are location specific. It streamlines the process of creating a website and finding content so businesses can bump up their online presence.
Local.com said that by acquiring Octane360 it could expand the network of businesses that use Local.com for advertising and to increase Web traffic.
“What we’re going to do with Octane is create opportunities for small businesses to be found online, for Google searches to actually find them,” said Peter Hutto, senior vice president of Local.com.
In the first quarter of 2010, Local.com reported earnings of $2.6 million, or 16 cents a share, a 31% increase from earnings in the previous quarter of $2 million, or 13 cents.
In June, the company announced that second-quarter and annual financial results were expected to exceed previous projections.
Times staff writer Jessica Guynn contributed to this report.
