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How Much Is Local Search Traffic Worth?

Is it enough to build traffic without a brand?



3:11 pm on Jul 29, 2007 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

The recent acquisitions of Business.com and PremierGuide got me thinking about the value of product/service-specific traffic and how much premium is added by scale/brand/penetration.

If we ignore the layout differences between Business.com and the more typical IYP format we can see that the type of visitor should be similar - people looking to buy products or services. They get a lot of visitors and have a great domain/brandability.

PremierGuide is at the other end of the scale, it's a white-label Local Search provider (so there's not much consumer branding that can go on there) that gets roughly a tenth of the traffic of Business.com.

Here's what they sold for:

Business.com $350M
PremierGuide $2M

Considering that PremierGuide had revenues of around $800K/year I'd say the $2M price was a little low, but even allowing for that it's still way below the $/visitor price for Business.com.

At the low end of the scale it looks as though most people would be better off continuing to run rather than selling!

Has anyone seen a recent deal for a small/medium Local Search publisher (let's say 500,000 to 2.5M visitors/month) that had a good multiple?

I would have thought that larger companies would have been keen to buy up smaller ones and tie in the founders for a few years and then have them on non-competes (with the acquisition price being enough to justify this).


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