Local media and ad firm Marchex has signed an agreement to acquire pay-per-call ad technology firm VoiceStar for $20 million, plus $8 million in additional investments through 2008. With the move, the company will add call-based services to its considerable media and ad sales network.
Separately, Marchex said it hired Bill Day, the founder of About.com and later the chief executive officer of WhenU, to lead its consumer-facing media business as chief media officer.
Marchex distributes ads to 100,000 of its own local and vertical Web sites, as well as to over 100 search and vertical network partners. By offering call-based ad services across those properties to its "tens of thousands" of local and national advertisers, the company believes it can quickly scale up a pay-per-call offering.
"We have distribution. That's half of it," said Marchex Chief Strategy Officer Peter Christothoulou. "We've focused on building this comprehensive digital agency platform for local advertisers," a platform he said has helped thousands of advertisers create and measure locally driven online campaigns. From there, he said, it's only a small step to integrate pay-per-call with its dashboard and offer local marketers the option to pay for online leads resulting in a phone call -- an action generally considered more valuable to small businesses than a click.
Yet despite early excitement about the promise pay-per-call advertising holds for local business, and despite the entry of major players such as Google and eBay, the ad billing method has grown more slowly than many expected.
"You've yet to see the explosion of pay-per-call for advertisers," acknowledged Christothoulou. But he added, "We have as good a shot as anyone at being a leader in this category," owing to Marchex's wide distribution network.
The acquisition agreement provides for an initial $12.9 million cash payment, plus $7.1 million in restricted Marchex stock. An additional $8 million payment will cover costs related to product maintenance, infrastructure and other operational items through the end of next year.
New Chief Media Officer Bill Day joins Marchex as the company prepares to relaunch local search and listings portal OpenList.com, which it acquired over a year ago and since used as a springboard to introduce over 100,000 local and vertical properties back in June.
While at About.com, Christothoulou said Day performed essentially the same feat for vertical content that it's trying to do for regional information. "About.com [is] focused on user generated community generated content in vertical categories," Christothoulou said. "We're just going to take that approach and apply it to local categories.
Day is the first exec to hold the chief media officer post at Marchex. Responsibilities for content initiatives and other duties were previously handled by Marchex Chairman and CEO Russell Horowitz.
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