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Last week, announced that it will acquire PremierGuide, a white-label local search solution, for US$2 million. I’ve read a handful of reviews about this acquisition and most seem to be missing the most important part of this deal: It’s about the money.

Specifically, it looks to me like this deal has a pay-back for of about one year. I spoke with Heath Clarke, CEO of, about the deal this week to confirm a few numbers. Sure enough, here’s why this deal was such a no-brainer for In fairness, is a public company and Heath would only tell me that my numbers were in range (or close or no comment). Here are the details I put together:

  • PremierGuide has about 55 million page views. Based on a few calls, I’ve triangulated CPM to roughly $14. It has the retail Google ad share and a few other smaller ad deals.
  • reports about 10 million unique users. After pulling apart the financial statements (and making a few more calls), the company has a CPM of about $40 (plus or minus). This CPM rate is a combination of a negotiated performance rate from YSM, an Idearc distribution deal and a few others.

Therefore, should generate top-line revenues off this acquisition of roughly $2.2 million per year vs. an estimated $770,000 that PremierGuide had been generating previously (note: the release says $800k). There is even more upside here since the folks will likely go back to the ad networks and demand and receive a deeper ad revenue share for the combined traffic.

Then, of course, is out actively looking for other distribution, acquisition and partnership opportunities, which should continue to increase the top-line revenues.

This Post Has One Comment

  1. Two thoughts:

    1. $14 CPM seems high. Sure they have the content sandwhiched in two square ads with a skyscraper on the side, but we’ve done a lot of advertising in various areas of local (US, UK, hyperlocal, full country) and my own estimated guess (on that scale) would be roughly $10 CPM.

    2. At $800k revenue – doesn’t that still mean newspapers get $400k, leaving PG with 400k?

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