Slide 1: Local.com Corporate Presentation January 2011
Local.com Corporate Presentation January 2011
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements; Non-GAAP Financial Measures 2 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, ar
Slide 3: What We're Doing
3 What We're Doing Our Mission Statement: To be the leader at enabling businesses and consumers to find each other and connect, locally. Our Growth Strategy: Reach more consumers via useful products on owned and third-party sites, and monetize those consumers with a range of high-value ad products.
Slide 4: Increasingly diversified local search business
Corporation NASDAQ: LOCM is an increasingly diversified local search business Flagship 'Top 10' search engine* Local syndication network of over 100,000 sites Reach about 20MM MUVs each month Top 3 fastest-growing in local online advertising*** Deloitte 2010 Fast 500 2010 revenue ~$84MM, up 49% Y/Y;
Slide 5: A Diversified Local Search Business
A Diversified Local Search Business 5 ADVERTISERS TECHNOLOGY TRAFFIC 17 Million Local Business Listings Local Ad Exchange & Feed Management Custom Local Content Creation & Management Geo-Cat Website Creation & Hosting Ad Feeds Flagship Site Regional Media Local Search Engines Owned Domains 3rd Party
Slide 6: How We Operate
How We Operate 6 All numbers as of Q3, 2010 Regional Media 30% of revenue 'Partner traffic' >80,000 sites About 5MM MUVs Channel & Domain Partners Revenue recognized in respective BU Supports all three businesses Advertisers 18% of revenue Ad feeds >60k direct advertisers Consumers 52% of revenue 'O
Slide 7: Experienced Team with Strategy Discipline
Experienced Team with Strategy Discipline 7 Heath Clarke Chairman & CEO 11 years 20+ yrs exp VP eCommerce LanguageForce CEO/Founder AFP (Australia) Scott Reinke General Counsel EVP and Gen. Counsel, Emerging Media Group, Inc. (TRAFFIQ, Inc.) Steven Schindler VP Marketing Co-founder/President, Sasa T
Slide 8: Significant Technology Portfolio
Significant Technology Portfolio 8 6 patents issued, 10 pending in local/mobile/Octane Lucene core Multiple databases with millions of SMB listings to validate business information We crawl the web and use our proprietary Keyword DNA(tm) + web indexing algorithms to generate all our search results H
Slide 9: O&O - Flagship Property: Local.com
O&O - Flagship Property: Local.com 9 Our flagship property About 15MM MUVs Relaunched November 2010 Crisper user experience New design & navigation Enhanced business info Coupons Combines local merchants, online coupons, weekly circulars, grocery & national Connect to loyalty cards Improved Events B
Slide 10: O&O - New Property: iTwango
O&O - New Property: iTwango 10 A new consumer product Acquired January 2011 Plan rebrand/relaunch mid-2011 Feature rich for consumers Easy consumer registration Geo-interest areas by consumers Browse deals Feature rich for advertisers Easy self-service option Multiple listings plus location-based of
Slide 11: O&O - Proprietary Network
O&O - Proprietary Network 11 >20,000 hyperlocal geo-cat sites Owned by Local.com but available for 'lease' to local businesses for advertising High visibility & value to advertiser High relevance & functionality to user High revenue & margin to Local.com
Slide 12: O&O - Target Market
O&O - Target Market Over half of our O&O traffic is the '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 categories have
Slide 13: O&O - Growth Strategy
O&O - Growth Strategy 13 Repeat usage More SEO traffic Additional ad inventory Shopping Health & Wellness Events Beauty Higher page views/visitor Repeat usage Develop content Monetize with local advertisers A larger ecosystem with greater defensibility and higher margins
Slide 14: Network - Three Market Segments
Network - Three Market Segments 14 We distribute our search results and content to other sites and monetize their local search queries with our ads We share in revenue generated from those ads with the sites 1,000+ regional media sites We develop SEO traffic via our private label solution We monetiz
Slide 15: Network - Growth Strategy
Network - Growth Strategy 15 Expand domains under management Expand regional media ad local search network Maintain traffic quality Syndicate more content & features to Network Develop more 'widgets' Drive interaction through a better user experience A/B testing for optimal monetization Increate and
Slide 16: SAS - Offerings
Local Premium Retail $50-$199/mo Exact Match Retail $99-$500+/mo SAS - Offerings Most monetization/revenue comes from our ad feeds This is expected to reduce as % of revenue as we expand other sales initiatives based on new products Yahoo! is largest partner historically at ~ 50% of revenue Supermed
Slide 17: SAS - Growth Strategy
SAS - Growth Strategy 17 Expand internal telesales Orient towards higher margin Exact Match products Higher monetization allows us to compete for increased distribution Increased distribution attracts more advertisers 'Virtuous cycle' Yellow pages publishers Agencies Regional media partners Vertical
Slide 18: M&A Strategy
M&A Strategy Completed a handful of transactions in the past 18 months Most recent: OCTANE360, iTwango All were accretive or near- term accretive Continue to look at new opportunities all the time Acquire New Brands Content Organic traffic Acquire Network Products Acquire Ad Products Acquire Network
Slide 19: Revenue & Adjusted EPS
Revenue & Adjusted EPS 19 Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items Prelim 2010 as of 01/07/2011 Adjusted Net Income/share Revenues $mil
Slide 20: P&L Trend
P&L Trend 20 Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items * * Prelim 2010 as of 01/07/2011
Slide 21: Q2 Balance Sheet & Capitalization
Q2 Balance Sheet & Capitalization 21 Key Balance Sheet Items (in thousands) Capitalization (in thousands) Sept 30, 2010 Cash $11,887 Accounts Receivable 17,261 Total Assets 63,789 Total Debt 7,000 Total Liabilities 24,460 Shareholders Equity $39,329 Sept 30, 2010 Common 16,572 Options 1 3,576 Warran
Slide 22: Thank You
22 Thank You Heath Clarke Chairman & Chief Executive Officer hclarke@local.com Ken Cragun Chief Financial Officer kcragun@local.com 949.784.0800 http://corporate.local.com
Slide 23: Appendix: Key Investment Considerations
Appendix: Key Investment Considerations 23 Rapidly growing company in a rapidly growing market Beneficiary of secular trend towards online ad spend by SMBs Proprietary unique ad platform and product suite Attractive Position in Growing Market Multiple revenue streams with adjusted earnings Growth st
Slide 24: Reconciliation: Adjusted Net Income to GAAP Net Income
Reconciliation: Adjusted Net Income to GAAP Net Income 24 * Prelim 2010 as of 01/07/2011 *