Local.com Scores 411 Patent, Stock Soars
The world was relatively quiet last week when Local.com announced it had been awarded a patent on local search. Not so today, as another patent is revealed for an ad-supported 411 local search model. As of right now, 2:30 EDT, shares of Local.com are up 62 percent.
Wall Street’s so excited about it because, well, the patent will force other local directory services, like ones offered by Verizon, Idearc, and most recently, Google, to form licensing agreements with Local.com.
To quote the company more exactly, Local.com chairman and CEO Heath Clarke said, “We encourage directory assistance and free 411 companies that are interested in using our intellectual property to enter into licensing agreements with Local.com.”
What he means by "encourage" is "you better."
Last week’s award, U.S. Patent Number 7,231,405 covers location-based search, or indexing and retrieving web-related information by geographical location.
The patent announced today covers a method of responding to enhanced directory assistance inquiries using various protocols including voice-enabled and SMS systems, as well as pay-per-referral monetization methods.
“In our view," said Clarke, "the burgeoning free 411 marketplace is being underwritten by a variety of advertising supported models. Our patent 7,200,413 is directly related to a referral advertising model such as pay-per-click or pay-per-call listings, which are delivered to consumers as a result of an enhanced directory assistance inquiry or local search, where the results can be provided to consumers via many mobile channels, including voice.”
And that means everybody’s going to have to pay up, which is why Wall Street is so excited, and why Local.com shares are trading at above $11.
Luckily, Google has a lot of cash sitting around. The search company recently updated its already existing ad-supported telephone directory service, 1-800-GOOG-411, to include mapping services as well.