Search Engine Marketing - PPC Management Services

Marchex Adds Call-Based Advertising Services to Local Advertising Platform with VoiceStar Acquisition

SEATTLE (BusinessWire EON) August 9, 2007 -- Marchex total anticipated investment to acquire VoiceStar will be $28 million, consisting of approximately $20 million in transaction consideration and $8 million in company investment. Specifically, transaction consideration consists of approximately $12.9 million in cash consideration and Marchex will issue approximately $7.1 million in restricted stock that is subject to vesting over two-and-one-half years from closing to certain employees of VoiceStar; and company investment consists of $8 million relating to products, infrastructure, human resources and other items through 2008. The acquisition is expected to close by October 1, 2007. VoiceStar will continue to operate from its headquarters in Philadelphia, PA.

"With the addition of VoiceStar, Marchex offers one of the most comprehensive online advertising platforms and agency services for local advertisers at scale in the industry. We can now offer local aggregators a private label search- and call-based marketing platform with distribution for their advertisements in search engines, vertical Web sites, and on our network of local Web sites," said Peter Christothoulou, Marchex Chief Strategy Officer. "Additionally, we can now also add proprietary pay-per-phone-call advertising units to our network of local Web sites, which allows us to increase the direct monetization of our own properties."

"We are very excited to be joining forces and bringing the value of our combined assets to a greater audience," said Todd Lieberman, VoiceStar CEO. "We share Marchex's vision for unlocking growth opportunities in the local space and look forward to being a part of the innovative solutions Marchex brings to the marketplace."

In addition to enabling Marchex to offer one of the most comprehensive local advertising platforms in the industry, the VoiceStar acquisition adds more than 100 local advertiser aggregators, including Comcast, The Cobalt Group, and YellowBook USA to Marchex's current partner roster which already includes AT&T and Yellowpages.com. VoiceStar also increases Marchex's ability to directly monetize its proprietary network of Web Sites, lessening its dependence on third-parties and increasing the revenue yield from its Web sites through the utilization of call-based advertising units which tend to have higher rates then pay-per-click listings.

Pay-Per-Phone-Call Offers Significant Growth Opportunities:

In addition to the growth opportunity associated with the pay-per-phone-call market which the Kelsey Group estimates will reach up to $4 billion by 2009, Marchex believes that providing advertisers with call-based advertising options, in addition to search-based marketing tools, is a prerequisite to success in the local advertising channel. According to Piper Jaffray, only 42% of the estimated 20 million small- to medium-sized businesses (SMBs) in the U.S. have Web sites and many others are still are at the early stages of online marketing. As a result, call-based advertising will continue to be a priority for local advertisers, further evidenced by a recent Kelsey Group survey reporting that 71% of local advertisers would rather pay for phone calls versus clicks.

"We believe that call-based online advertising is not only a key extension of local search, but is also an important driver to close the gap between the vast number of consumers searching locally and the small percentage of local businesses currently advertising online," said John Keister, Marchex President and Chief Operating Officer. "Phone calls have been, and will continue to be, a predominant way in which consumers connect with small businesses. Providers that deliver both search- and call-based solutions will be in a tremendous position to expose online advertising to the millions of SMBs who are not yet online."

VoiceStar's technology generates custom, trackable phone numbers for advertisers. Whenever an advertiser's phone number is dialed by a consumer who sees a relevant advertisement (online or offline), the calls are routed through VoiceStar's servers to the advertiser. From that point, the call is tracked, monitored, recorded and billed. The technology supports multiple advertiser implementations, including: click-to-call, Web form-to-phone and other call-based products.

The combination of VoiceStar's call-based offerings and technology with Marchex's search-based offerings delivered through Marchex Connect, Marchex's local online advertising platform, provides significant benefits for local advertisers and aggregators as well as national advertisers. Aggregators will now have expanded integrated search- and call-based offerings to present to their large base of local advertisers. In addition, national advertisers will increasingly benefit from integrated search- and call-based options from Marchex by enabling them to better target their ads locally and more effectively measure the offline revenue driven from their online marketing using call-tracking.

Marchex Updated Financial Guidance:

The VoiceStar transaction has the following anticipated financial impact to Marchex.

1. While Marchex will only recognize a partial year contribution from VoiceStar, it believes that VoiceStar will generate revenue of approximately $1.5 million for the full year 2007, with an operating income loss. Revenue contribution to Marchex from VoiceStar for the remainder of 2007 is anticipated to be $0.5 million. Additionally, based on current VoiceStar growth rates, Marchex anticipates that VoiceStar's 2008 contribution will more than double its total anticipated 2007 revenue, excluding cross-selling opportunities with Marchex.

2. Marchex expects that investment in VoiceStar and various call-related opportunities will total $3 million in 2007 and $5 million in 2008. The investment will primarily be directed toward: (i) increased infrastructure, communications platform investments, and investments in technology and development to drive integration into Marchex and launch marketplace systems (pay-per-phone-call system for syndication across relevant proprietary and third party Web sites); (ii) Marchex partner support; (iii) increased sales, marketing and business development initiatives; (iv) increased intellectual property development, (v) increased personnel costs; and (vi) increased expenses to support Marchex's public company requirements.

About Marchex, Inc.

Marchex (www.marchex.com) is a local online advertising company and leading publisher of local content. Marchex's innovative advertising platform delivers search marketing products and services for local and national advertisers. Marchex's local content network, one of the largest online, helps consumers make better, more informed local decisions though its network of content-rich Web sites that reach tens of millions of unique visitors each month.

Forward looking statements:

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. In addition, Marchex's acquisition of VoiceStar remains subject to customary closing conditions.

KEYWORDS: Search Marketing Online Advertising Search Engines Shopping Search Local Search

MORE ARTICLES:

Atlanta Search Engine Marketing Firm Prominent Placement is Finalist for Three American Marketing Association Awards
Prominent Placement, Inc., a leading Atlanta search engine marketing firm, received three Atlanta Marketer of the Year (AMY) Finalist Awards from the American Marketing Association (AMA). All three of the firm's entries were selected as finalists out of 130 total submissions.

Internet Marketing Expert Shows How Search Engine Optimization and RSS Can Boost Public Relations Visibility
TopRank CEO Lee Odden to Speak at Bulldog Reporter's Advanced Public Relations Technology in Practice Event

Search Engine Marketing Agency Launch Mobile Search Marketing Service
With close to 3 billion mobile device users worldwide, Search Engine Marketing Agency Neutralize has responded to client demand with the launch of Mobilize.

Bill Casey Opens Full-Service Web Site Design, Development and Search Engine Optimization (SEO) Firm
New Atlanta web site design and SEO firm gives small and medium sized businesses a simple and effective path to creative, profitable web sites. Bill Casey Consulting provides all the web services a business needs, gauges its success on the profitability of its clients' sites, and streamlines the development process to lessen client burdens.

Engine77 -- Search Engine Internet Optimization Firm Unveils New SEO Technology and Service
Infinidigm, Inc., a search engine optimization, search engine marketing, and software development firm, announces its cornerstone search engine marketing and search engine optimization technology-based service called Engine77. Engine77 is a robust software platform and service used to optimize web sites, perform market research, and develop sites based upon the analysis.

Twelve Horses Expands Search Engine Optimization, Search Engine Marketing Services
Through hiring SEO expert Eric Morgan Twelve Horses has expanded its service offering to include SEO. Twelve Horses is a Reno based company that currently provides web design, web development, and email marketing services to clients on a national basis.

PPC Summit Workshops: Learn Search Engine Marketing in Two-Day Seminars from Search Industry Experts
PPC Summit unites some of the foremost minds in the pay per click advertising world to change the way the subject is taught. Targeted at a range of skill levels and suitable for a wide variety of professionals, participants acquire new skills and leave with a solid understanding of search engine marketing. The team is bringing their seminars to cities all over North America, as well as London in the UK, in 2007.

Search Engine Marketing Firm iProspect Wins at Search Engine Strategies Awards
iProspect Client Microsoft Small Business Center Wins Award for Best Business to Business Search Engine Marketing Campaign

Search Engine Optimization Company Announces Expansion in Business and New Marketing Strategy
Within the past two years Keyword Performance LLC, a creative search engine marketing firm, has tripled in size, offering new services and gaining large company recognition.

Search Engine Marketing Agency, Target Marketing Solutions, Announces Four New SEM/SEO/PPC Clients
More and more companies are utilizing search engine marketing as a key advertising strategy for reaching potential customers. Through the use of website analytics, search engine marketing provides trackable and actionable data to maximize advertising effectiveness.

Local Search Engine Marketing Expert to Speak at Search Engine Strategies Conference in Chicago
Janet Driscoll Miller, a local leading search engine marketing expert, will be speaking at the Search Engine Strategies Conference in Chicago on Monday, December 4, 2006. Miller is the president and CEO of Search Mojo, a search engine marketing firm.

Internet Marketing Agency Reveals Search Engine Optimization Secrets
If your web site doesn't have a Top 10 search engine ranking, you're missing out on approximately 85% of the Internet users who are looking for the exact products or services you offer.

SpiderSplat.com Expands Search Engine Marketing to Include Social Media Optimization Services (SMO Consultant)
SpiderSplat, a leading provider of Search Engine Marketing, Pay-per-Click marketing and Keyword syndicated press releases, has expanded its offering to now include Social Media Optimization services. This new service called the SMO Consultant, offers clients the ability to have the opportunity to dramatically increase traffic and turn visitors into paying customers when used with SpiderSplat's SEM services.

Search Engine Optimization Firm, Brick Marketing Revises Search Engine Optimization Service
Brick Marketing, an internet marketing company, has recently revised and re-launched their search engine optimization services to adjust with growing trends. Brick Marketing has acknowledged that a revision of this product and the way it was offered to our clients had to be revised in order to stay competitive with other agencies. Potential customers can now be accustomed to similar pricing strategies has other players in the industry. The online marketing industry is a very fast moving industry with changes occurring sometimes over night. In order for firms and consultants to stay in a competitive range a watchful eye must be kept on all offerings in order to be able to provide only the best solution for clients.

Why PPC And SEO (Search Engine Optimization) Are The Most Popular Web Site Promotion Methods
There has to be a reason why PPC (pay-per-click) ads and SEO (search engine optimization) are the two most popular website promotion tools on the World Wide Web today. As a matter of fact, it is not too difficult to figure out why these two website promotional methods are so popular. It is quite simple ? they work. Actually they are very fast and effective in getting traffic to a web site. Internet Marketing can be overwhelming for some but if you leave it to the reputable professionals you can expect great results. Picture this situation. You select a few keywords come up with some attractive headlines and then launch a PPC ad campaign with Google Adwords. The next thing you know is that your site is receiving a steady flow of traffic...