Citysearch Acquires Insider Pages

IAC/InterActiveCorp, parent to and Citysearch, announced plans to acquire reviews-based local search provider Insider Pages and operate it as a separate brand within the Citysearch business.

“Insider Pages has great reviews content and a fantastic team that we wanted to bring on board to continue our product innovation roadmap,” Dinesh Moorjani, VP of corporate strategy and development at Citysearch, told ClickZ.

IAC will retain the Insider Pages brand identity and positioning, using its reviews to strengthen and complement Citysearch. The site has more than 600,000 merchant reviews on local businesses in 30 markets across the U.S., and 2 million monthly unique users, according to comScore. All 10 Insider Pages employees will move from Redwood City to Citysearch’s San Francisco office.

While the Insider Pages brand will be retained, it will be an operating unit of Citysearch. IAC structured the two companies in this way to keep the benefits of both brands, while preventing them from competing, Moorjani said. The two sites are essentially in the same business, but Insider Pages, with strength in the home and garden category, complements Citysearch’s strengths in arts and entertainment, he said.

“Operating Insider Pages as a completely different entity from Citysearch would arguably be competitive. But having Insider Pages as part of Citysearch, operating as an independent brand, with a slightly different community of users, allows us to take advantage of and scale their review-generation channels and be more synergistic,” Moorjani said.

Insider Pages’ technology and management teams are expected to benefit both brands in the future, he said. Additional synergies with IAC’s ServiceMagic, which is strong in reviews in the home improvement and repair category, are also expected down the road.

Maintaining several brands in local search could be both good and bad for IAC, according to Greg Sterling, principal analyst of Sterling Market Intelligence. “It definitely creates some brand challenges for them,” Sterling told ClickZ. “By not having a single strong brand, they risk fragmenting their audience. But the local market is fragmented anyway, so it may help them broaden their appeal.”

IAC is not revealing the purchase price, but it’s rumored to be near $13 million. While such a figure is small dollar-wise, it could be an important deal for Citysearch, in terms of expanding its reviews content and getting a foothold in the online Yellow Pages market, Sterling said.

“It doesn’t give them a major advantage, but it does give them more ‘shelf space’ in the local search space,” Sterling told ClickZ. “Now they can claim they have more user reviews than competitors, which is important for Wall Street, at least.”

Insider Pages has been struggling to compete in the competitive local search space, and a sale had been rumored for some time, amidst layoffs and dwindling traffic.

IAC chairman Barry Diller has been intimating that he was on the hunt for more acquisitions. In February, Diller said at an investor conference that IAC will invest several hundred million dollars in original content ventures over the next two years. He has also repeatedly preached the importance of integrating IAC’s properties into a single, cohesive whole.

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