Citysearch Changes Name to Reflect Growth of Ad Network

Citysearch – the company, not the site – is changing its name to CityGrid.

Citysearch the Web site is well known as one of the original local online directories, with reviews of everything from restaurants to hotels to shoe repair shops. That site, which has been in operation since 1995 and was acquired by IAC in 1998, is keeping its name.

Lesser known is the locally oriented ad network called CityGrid that the company launched in 2007. But while that name remains unfamiliar to some, the network has outgrown the site in recent years. To reflect that change – and to move the company closer to its goal of being an all-around online consultant to local businesses – the umbrella company formerly known as Citysearch is changing its name to CityGrid.

“I needed to change the name because when I said ’Citysearch,’ people immediately thought about the online guide,” said CEO Jay Herratti. “And they didn’t understand that actually our business model has really become much broader and is really anchored around the network, which will ultimately be bigger than anything we own and operate, because the scale potential when you have a network is much, much bigger.”

CityGrid, as it is now known, also owns Urban Spoon, an online restaurant guide that it acquired early last year, and Insider Pages, a local business guide that it bought in 2007.

But because the economics of local advertising can be tough to crack, the company in recent years has set its sites on becoming more of a consultant to local businesses than simply a guide to them. First it launched its ad network, and in the next few months it will launch an actual consulting unit that will help local companies navigate the online world – advertising, getting included in listings and dealing with negative reviews.

“Maintaining the data for 15 million businesses when there are so many going in and out of business, changing their phone numbers and hours and menus, is costly, ” Herratti said of the local listings business. “And to acquire advertisers at a local level is really an exercise of going to door to door, and the dollar size per deal is low. The economics are challenging.”

“There are so many players in this space right now, and I think there are very few who would stand up and say, ’We have a lucrative business model,’” he continued.