I just discovered (via Andrew Shotland) that local rating site Grayboxx has sold its assets to BayAdvisor. The company had an interesting idea in its algorithmically derived “implicit ratings” for local businesses — the benefit being review generations in categories traditionally difficult to generate human reviews (plumbers, etc.).

The methodology for doing this was kept a secret for competitive reasons, which was met with a certain degree of mistrust from users. That, plus the normal challenges in launching a destination strategy in the fragmented and competitive local space, probably did the company in.

Not to mention a likely lack of funding — or at least not enough to get over the hump of the trust thing, which would have required a lot of time, marketing/PR and positive reinforcement. The technology looks like it will still be given this chance though — living on in a different venue.

We commend Grayboxx and its CEO Bob Chandra for the effort, and wish him and others at the company the best of luck.

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Update: The following release just landed in my inbox:

Santa Clara, CA — April 9, 2007 — Grayboxx Inc., an online local search firm, today announced that BayAdvisor has acquired its intellectual property for an undisclosed sum. The technology transfer includes grayboxx’s patent rights to its unique PreferenceScoring™ technology, which algorithmically ranks local businesses in terms of popularity.

“I think BayAdvisor may do some interesting things with the PreferenceScoring technology and perhaps extend it to new fields,” said Bob Chandra, founder of grayboxx. “There is still vast potential within local search but also in related vertical search fields.”