R. H. Donnelley has moved forcefully into the organic and paid search business by acquiring LocalLaunch, the Chicago-based provider of search and tracking services for the small business community. The acquisition follows similar Yellow Pages search enabler deals, including Verizon’s acquisition of Inceptor and YellowBook’s acquisition of Clickforward.
The deal includes LocalLaunch’s 40 sales specialists and keeps President Justin Sanger and (possibly) other managers in place. One of the company’s value propositions to RHD is its ability to reach out to the two-thirds of small businesses that aren’t traditional Yellow Pages advertisers.
While LocalLaunch offers some pay-for-performance distribution, its primary focus is in hosting a master business profile and distributing it across multiple directories (including competitors to RHD). It’s a low cost/low risk model that appeals to low-end business owners with simple needs. However, the company may not have the scale to serve more sophisticated, higher-spending companies.
As a new part of RHD, LocalLaunch becomes part of an increasingly impressive arsenal of Internet tools and services that RHD inherited from Dex; that it was developing on its own (i.e. Chicago B2B), and that it is developing with Local Matters. Strategically, the acquisition gives RHD better positioning in its negotiations to join YellowPages.com (if they are ongoing). But in case that doesn’t work out, RHD is also better positioned to stand on its own.
This isn’t the first time, of course, that RHD has gotten involved with an independent, Internet driven sales force. In 1999-2000, the company developed GetDigital Smart, but management was less committed to an Internet strategy at that point, and closed down operations, citing costs and the premature marketplace.