Local.com Shares Jump on Google DealFriday, July 8, 2011
Shares of Irvine-based search engine operator Local.com Corp. surged Friday, a day after the company announced a two-year deal with Google Inc.
Shares in early morning New York trading peaked at more than 20%, before losing some ground in afternoon trading to a market value of about $82 million.
Investors seized upon Thursday news that Local.com inked an agreement with Google that provides “advertising and search services on certain websites,” according to a filing with the Securities and Exchange Commission.
The company, which runs an online search engine that directs users to local businesses, has been under pressure since its largest client Yahoo Inc. moved to Microsoft Corp.'s Bing search engine earlier this year.
Bing was charging advertisers less for Local.com's search traffic, resulting in less revenue per click than what Yahoo had paid prior to the Microsoft deal, according to prior statements from Local.com officials.
Yahoo contributed about 37% to Local.com's first-quarter revenue, down from 49% a year earlier.
Google contributes less than 10% to its revenue.
Local.com users also get search results that include offers from local businesses, reviews, links to local websites, maps, driving directions and other features.
The agreement with Google begins August 1 and runs through July 2013.
Local.com got started a decade ago as Interchange Corp.