"This will allow ReachLocal to enable other deal sites and publishers to supply and/or resell deals, as well as greatly improve Deals sourcing, syndication and personalization for the industry as a whole," a representative for ReachLocal tells WebProNews.

"The rapid growth in the local deals space further demonstrates the magnitude of the shift of dollars from offline to online," says ReachLocal co-founder and CEO Zorik Gordon. "We believe that local deals are here to stay, will become ubiquitous, and will become an important way for publishers to monetize local users online."

"However, we believe the challenges of deal sourcing is the biggest gating factor limiting entry and success of additional players in this market," adds Gordon. "Much in the same way we bring SMBs’ Search, Display and Social Media spend to online publishers, we see a  large opportunity to play the same, central role in the deals ecosystem by becoming the premier source of deals from local merchants to publishers."  

DealOn has only been around since 2009, and only operates in 18 markets in the U.S.

According to Business Insider, Priceline wanted to acquire DealOn.

quoted today

saying that the erosion in usage of print yellow pages is likely to fall off at a higher rate this year — by 10% this year, compared with only 2% to 3% erosion in recent years.

They state that a combination of factors such as more users going to internet yellow pages and local search engines combined with a recession are propelling the rapid erosion. Concerningly, one can extrapolate that if print YP usage is dropping, advertiser dollars might also follow the herd.

As Greg Sterling points out, The Kelsey Group has historically been a very staunch defender of the print YP industry, so this article is a bit of a gut-punch to people in the legacy print business, even though anyone watching the trends over the last few years won’t find it all that surprising.

One thing the Media Post article doesn’t mention is how a number of smaller, regional print yellow pages companies have had surprising growth in ad sales over the past year, likely at the expense of the larger yellow pages directory sales. As Greg further points out, some of the smaller, nimble companies like ReachLocal (who are frenemies with the yellow pages industry) may be poised to take over the small business advertiser base as those companies’ agencies of choice if the yellow pages industry cannot retain them. Yellow pages has held a home court advantage with small businesses for a long time, but there are a lot of hungry wolves nipping at their heels, and they will need to retain their advertisers while transitioning them over from print to online advertising in order to retain revenue over the long term.

I’ve suggested before that the concept of “yellow pages” itself might also be endangered in its online incarnation, since specialized directories and local search engines may now be obscuring the need for “traditional” yellow pages websites in the eyes of consumers. Indeed, I see a new generation of young consumers who barely seem to know what “yellow pages” is, and this could explain why fewer and fewer people seem to be trying to find yellow pages in Google:

(click to enlarge)

So, yellow pages companies have some multi-fold challenges to face. They must strive to transform themselves from being only print yellow pages into being a liked/trusted agency that small businesses perceive are vital/useful for getting their ads into multiple sites throughout the internet, and they simultaneously need to transform their traditional yellow pages directory websites into local information portals with broader appeal and compelling stickiness to attract and retain the newer generation of users.

The bigger yellow pages companies are aware of all this, and are not to be counted out of fight yet. Unlike the newspaper industry which has been a little late in adapting to the internet paradigm, yellow pages are adapting themselves to protect their competitiveness in the market, and the analyst warnings are only intensifying their attention and resolve.

Comments

Yes, there’s nothing quite like cozying up to Google, and in addition to its relationship with the search giant, ReachLocal has established bonds with Yahoo, MSN, and Ask.  Still, Zorik Gordon, ReachLocal’s co-founder and CEO, stated, "Google is an instrumental part of our core business, and we look forward to continuing to work together as ReachLocal rapidly expands into markets around the world."

That core business involves providing online marketing to small- and medium-sized businesses, by the way.  Also, as you might have guessed, it looks like everything will continue to work out well for ReachLocal.

Going beyond the press release-ese, Kevin Heisler notes, "The deal gives ReachLocal a leg up on competitors in local search who won’t benefit from the same status in the Google ecosystem.  There’s a long track record of authorized resellers of search engine advertising products succeeding in the hyper-competitive PPC channel."

Finally, according to Piper Jaffray, there are signs that online advertising may be one of the safest places (financially speaking) to hide out in 2008.