I am not, of course, implying that anything illegal occurred here – Local.com put out a press release on the matter that explains all the relevant details.  Furthermore, I have no desire to jump to conclusions after the mistakes that were made concerning the Hearst sell-off.  This move does seem odd, though, to a “financially inexperienced” person like me.

In any event, the release explains, “The gross proceeds . . . are expected to be used for acquisitions, to expand direct sales channel development, to protect the company’s growing intellectual property portfolio, and for general working capital.”

Then there’s a statement saying, “In connection with the sale of common stock the company also issued to the investors warrants to purchase up to 471,386 additional shares of the company’s common stock at a price of $7.89, exercisable beginning February 1, 2008 and for a period of five years thereafter; and up to 471,386 additional shares of the company’s common stock at a price of $9.26, exercisable beginning February 1, 2008 and for a period of six years thereafter.”

Again – odd.  But Search Engine Journal’s Loren Baker doesn’t bat an eye, and instead goes on to note other recent Local.com activity; just a couple of weeks ago, the company acquired PremierGuide.

For the record, Hearst only had a 22 percent stake in Local.com, so it’s not like the search company is now wandering about without an owner.  And based on the self-provided corporate description of PremierGuide, it seems that it’s a better match for Local.com than Hearst ever was.

Heath Clarke, Local.com’s chairman and CEO, might agree.  “PremierGuide has built up a large publisher network with a product that serves a complementary segment of the regional media market to our LocalConnect platform,” he stated in a press release.  “Excluding amortization expenses, this acquisition is expected to be immediately accretive and effectively double our organic traffic – an important part of our growth and margin strategy.”

The acquisition won’t make a huge dent in Local.com’s current finances – PremierGuide went for about $2 million, and Local.com’s market cap is just shy of $78 million.  That’s not to say PremierGuide was a steal – strangely, PremierGuide.com is the ninth result in a Google search for “PremierGuide” – but the price seems reasonable.

Also, for those of you who like to track personnel transfers, “Malcolm Lewis, PremierGuide’s CEO, will become Local.com’s vice president, private label,” according to the release.

UPDATE: As reported by Barron’s Online, "A previous version of this story incorrectly reported that Hearst had [sold] its entire stake, a conclusion I reached based on a filing on Form 4 which showed that Hearst held zero shares; apparently the zero referred only to the shares remaining in the 250,000 block of shares sold on July 12.  I apologize for the error."