Slide 1: Local.com Corporate Presentation March 2010
Local.com Corporate Presentation March 2010
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements; Non-GAAP Financial Measures Forward-Looking Statements: All statements other than statements of historical fact included in this document regarding our anticipated financial position, business strategy and plans and objectives of our management for future operations, are
Slide 3: Timeline 1999 - 2010
Timeline 1999 - 2004 2005 - 2010 1
Slide 4: A local search business with large search market share
Corporation NASDAQ: LOCM A local search business with large search market share ~25MM MUVs Top 10 US search engine* Largest private label local search network in US** Top 3 fastest-growing in local online advertising*** 2009 revenue: $56MM. 2010 revenue projection: ~$75MM ~47% 2009 YOY revenue growt
Slide 5: Three Business Units
Three Business Units Product and Technology Consumers Proprietary search traffic About 15MM MUVs 58% of revenue Regional Media Partner traffic About 8MM MUVs 31% of revenue Advertisers From ad partners... Plus 50k direct subscribers 11% of (direct) revenue All numbers as of Q4, 2009 3
Slide 6: A Diverse Local Ecosystem
A Diverse Local Ecosystem Product and Technology 4
Slide 7: Experienced Team with Strategy Discipline
Experienced Team with Strategy Discipline Heath Clarke Chairman & CEO 11 years Bruce Crair Pres. & COO 4 years Brenda Agius CFO 1 year Peter Hutto SVP Corp. Dev. 4 years 20+ yrs exp VP eCommerce LanguageForce CEO/Founder AFP (Australia) 20+ yrs exp Co-founder/COO ZeroDegrees President Cox/Sprint PCS
Slide 8: Why Local Search?
Why Local Search? * Jupiter Research, Paid Search Through 2009. ** The Kelsey Group The future of search advertising is: Commercial search is inherently local About 80% of our incomes are spent within 25 miles of our homes 38% of searches on the internet today are commercial* 24% of searches are LOC
Slide 9: Patented Technologies
Patented Technologies KeywordDNA(tm) + web indexing algorithms Multiple databases with millions of SMB listings Presence at credible online nodes Actively marketing Business content 4 patents issued, 9 pending in local and mobile search 11 7
Slide 10: O&O - www.local.com
O&O - www.local.com Flagship property About 15MM MUVs Ads provided by ad partners plus direct Subscription, display, performance Virtually all US, local + commercial search traffic Very high monetization ($250+ RKV) Local business content Coupons, pictures, video, social ratings & reviews, bookings,
Slide 11: O&O - Target Market
O&O - Target Market 70% of our O&O traffic is the highly desirable 'Soccer Mom' demographic Aged between 25-45 with one child or more at home Controls significant portion of the household purse strings Typically spends 80% of that money within 20 miles of home 89% of in-store purchasers in key categ
Slide 12: O&O - Growth Strategy
O&O - Growth Strategy Greater defensibility Higher margins Greater leverage across Network More ad inventory Higher value proposition to advertisers 10
Slide 13: Network - LSN
Network - LSN Approximately 60 regional media partners including local newspapers, tv, radio stations Content developed for O&O site(s) can be syndicated across Network Network offers content leverage opportunity in the order of 1:6-8 Our Network represents 'partner traffic' 11
Slide 14: Network - LSN: Washington Post
Network - LSN: Washington Post 12
Slide 15: Network ad revenue sharing with partners
‘Ad Revenue + Partnerscanuse thelr ownadvertisers +/ + Simply sharead $ fromou ‘The Yellow Pages.com SJinteuus yodle 101010 010101 101010 XML 13
Slide 16: Network - Growth Strategy
Network - Growth Strategy Creates more ad inventory Increased value proposition to advertisers Leverage O&O content more fully 14
Slide 17: Sales & Ad Services
Sales & Ad Services 95%+ ad coverage from additional ad partners More advertisers coming online, bidding for more keywords at higher RPC O&O monetization $250+ RKV Network RKV not disclosed for competitive reasons and many more 15
Slide 18: Sales & Ad Services: direct SMB customers
Sales & Ad Services 50k+ direct SMB web listing & hosting customers Web listing fulfilled on www.local.com site Web hosting fulfilled by third-party Pay average of ~$40+ per month subscription Sold via telesales Billed via LEC (phone bill), credit card 16
Slide 19: Sales & Ad Services - Growth Strategy
Sales & Ad Services - Growth Strategy Higher monetization allows us to compete for increased distribution Increased distribution attracts more advertisers 'Virtuous cycle' 17
Slide 20: Local.com M&A Strategy
Local.com M&A Strategy
Slide 21: Revenues & Adjusted EPS
Revenues & Adjusted EPS Mid-range of Guidance Revenues $mil Adjusted Net Income/share Adjusted Net Income (Loss) = Net Income (loss) before Interest, Taxes, Depreciation, Amortization, Stock-based compensation, Warrant revaluation charges, and Non-recurring Items 19
Slide 22: Financial Performance Versus Guidance
Financial Performance Versus Guidance Adjusted Net Income (Loss) = Net Income (loss) before Interest, Taxes, Depreciation, Amortization, Stock-based compensation, Warrant revaluation charges, and Non-recurring Items Local.com Actual Reported Guidance 2/19/2009 Performance 5/6/2009 Revenue $10,600,00
Slide 23: P&L Trend and Forward-looking Guidance
P&L Trend and Forward-looking Guidance Adjusted Net Income (Loss) = Net Income (loss) before Interest, Taxes, Depreciation, Amortization, Stock-based compensation, Warrant revaluation charges and Non-recurring Items 21
Slide 24: Revenue by Business Unit
OCaL.com Revenue by Business Unit Revenue by Product Line Q109Q2-09 Q3.09 _a09 _—FY-09 Owned & Operated $ 82M $ 91M $ 100M $ 94M $ 367M Network Lem 23M 31M 50M 12.0M. Sales & Ad Services 13M 23M 2M 2M___7.6M Total revenue $ 11.1M_$ 137M_$ 15.1M_$ 164M_$_56.3M Total revenue sequential growth 16% 23%
Slide 25: Operating Expense as % of Revenue
Operating Expense as % of Revenue 23
Slide 26: Q4 Balance Sheet & Capitalization
Q4 Balance Sheet & Capitalization Key Balance Sheet Items (in thousands) Capitalization (in thousands) Dec. 31, 2009 Cash $10,080 $10,080 Accounts Receivable 8,792 8,792 Total Assets 41,253 41,253 Total Debt 3,000 3,000 Total Liabilities 18,308 18,308 Shareholders Equity $22,945 $22,945 Dec. 31, 200
Slide 27: Thank You
Thank You Heath Clarke - CEO hclarke@local.com Brenda Agius - CFO bagius@local.com 949 784 0800 http://corporate.local.com Local search for business, products & services
Slide 28: Appendix: Key Investment Considerations
Appendix: Key Investment Considerations Attractive Position in Growing Market Attractive Financial Characteristics Strong Operating Model Seasoned Executives & Board Rapidly growing company in a rapidly growing market Beneficiary of secular trend towards online ad spend by SMBs Multiple revenue stre