Slide 1: Local.com Corporate Presentation November 2010
Local.com Corporate Presentation November 2010
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements; Non-GAAP Financial Measures 2
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. 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: Local.com is a diversified local search business
Corporation NASDAQ: LOCM is a diversified local search business Flagship 'Top 10' web property* 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 guidance: $86-$87 MM, up 54% (based on 11/
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 'Partner traffic' >80,000 sites About 5MM MUVs 30% of revenue OCTANE360 Managed by SAS Supports all three businesses Advertisers >60k direct subscribers represent 18% of revenue Ad feeds from partners Consumers 'Our traffic' >20,000 sites Ab
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 - Proprietary Network
O&O - Proprietary Network 10 >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 11: 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 12: O&O - Growth Strategy
O&O - Growth Strategy 12 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 13: Network - Three Market Segments
Network - Three Market Segments 13 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 14: Network - Growth Strategy
Network - Growth Strategy 14 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 15: 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 at ~ 50% of revenue Supermedia is second
Slide 16: SAS - Growth Strategy
SAS - Growth Strategy 16 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 17: M&A Strategy
M&A Strategy Completed a handful of transactions in the past 18 months Most recent: OCTANE360 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 Networks Acquire
Slide 18: Revenue & Adjusted EPS
Revenue & Adjusted EPS 18 Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items Mid-range of Guidance
Slide 19: P&L Trend
P&L Trend 19 Actual Actual Actual Actual Actual Actual Actual Actual Guidance Description Q1-09 Q2-09 Q3-09 Q4-09 FY-09 Q1-10 Q2-10 Q3-10 Q4-10 Revenue $ 11,064 $ 13,726 $ 15,128 $ 16,364 $ 56,282 $ 18,631 $ 23,004 $ 22,457 $22,000-$23,000 Sequential revenue growth 16% 24% 10% 8% 47% 14% 23% -2% Ope
Slide 20: Revenue by Business Unit
Revenue by Business Unit 20 Note: Revenue numbers above rounded to the nearest tenth of one million dollars. Of the 61% in revenue growth for the first 9 months of 2010 vs. 2009, 55% was organic and 6% via acquisitions
Slide 21: Q3 Balance Sheet & Capitalization
Q2 Balance Sheet & Capitalization 21 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 Warrants 1 1,334 Fully Diluted 21,481 Options and warrants represent approx
Slide 22: Thank You
22 Thank You Heath Clarke Chairman & Chief Executive Officer hclarke@local.com Ken Cragun Interim 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