You Are Here: Home » CP Reports Blog » Market Alert: Ray Dirks Research report on Search Initiatives (private company) Jan 12, 2012 by Ray Dirks

Market Alert – RAY DIRKS Research recommends that Investors interested in on-line marketing companies take a look now at the private company Search Initiatives LLC and its wholly owned subsidiaries: e-Local Listing and MyLocally.

Search Initiatives is a leading provider of search-driven lead generation solutions for business in the United States.

Based in Temecula, California, Search Initiatives, and its subsidiary, e-Local Listings, drives revenue through Local Search by means of their ownership and operation of a portfolio of online properties which are focused on providing many thousands of online businesses and local branches of national businesses with potential customers who are searching online for the types of products and services that these businesses can make available.

Superior, next-generation technology, in terms of social media, as recently developed and proven by Search Initiatives and its wholly-owned subsidiary, e-Local Listings, has propelled this company to the leadership position in growth of revenues and earnings from the local Search marketplace, which is now the fastest growing segment of the huge Online Search arena.

Online Search has emerged as the single most valuable component of the dotcom economy. The Purchase which follows the Search may well happen in a traditional off-line location, but the research behind the purchase was driven by Search.

Search Initiatives and e-Local Listings, with their portfolio of Internet directories and platforms, can ensure that their customers will find the products and/or services that they want through Local Search, the fastest growing segment of the enormous and rapidly growing Online Search economy.

e-Local Listing’s technological prowess offers a turnkey, highly automated, fully managed Search Engine Optimization (SEO) solution under a very low monthly, pay-per-call, pricing formula that positions local businesses high in organic search results.

e-Local Listing owns six proprietary online directory sites including elocallisting.com, elocalprofiles.com, Cherrp.com,, twitterlocal.net, Twimail.com, and enetex.com, all of which are optimized to push businesses onto the first page of organic sales results in Google, Yahoo, Bing, and other search engines.

Customers track their leads through e-Local’s proprietary online dashboard, which records the calls and tracks calls, volume, and other advertising campaign details.

e-Local Listing gives small business an affordable solution for local online exposure. e-Local Listing is currently servicing over 75,000 customers ,with another million, yes, that’s 1,200,000, having been contracted already for the year 2011. !!!!! Based on current negotiations in process, Search Initiatives’ objective is to build this subscriber base to 6.0 million by the end of 2012. On average, these individual subscribers yield some $360 in revenue per year.

e-Local Listing’s prominent position in the market and proven results have meant that the Company has been able to contract with major online agencies such as Marchex, IAC, and Service Magic, among others, to provide leads to many hundreds of thousands of their partners’ customers through extensive SEO automation.

Founded in 2007, Search Initiatives and e-Local Listing has assembled an exceptionally strong management team, a key component to any businesses’ success, led by Tim Judd, its Chairman and Chief Executive Officer, who has 20 years of sales, marketing, and business development experience in Search, high tech, and new media. Mr. Judd is well-recognized as the leading provider of technology solutions to major newspaper companies around the world..

Tim Judd moved to the Internet and corporate Search world, and was instrumental in the recovery, growth, and successful acquisition of several leading Internet players. His background in Search provides a deep understanding of the business and the technology behind it. Coupled with Tim’s background in more traditional print technology areas, it’s a powerful combination.

Tim Judd spent ten years in International sales and marketing with Atex Media Solutions, the leading provider of integrated solutions to the newspaper industry worldwide. Tim focused on devising and delivering innovative solutions for the emerging new media space, which provided the ideal background for Search Initiatives by giving him a deep understanding of the newspaper business psychology. Tim participated in several successful startups, including the trade journal PR Week, one of the original Apple Dealers in the UK, and The Fingerprint Publishing group.

A native of London, England, Tim has resided in the United States for the past decade. He founded Contraco USA, an international search and consulting company focusing on vertical applications of innovative Search technology.

Tim has produced rapid revenue and profit growth. He is primarily responsible for product direction and market focus, managing strategic business relationships, and executing key business development initiatives. Prior to Contraco USA, he was Director Business Development for Terra Lycos and responsible for the maintenance and vigorous growth of Search traffic at Lycos through the development and deployment of the Lycos’ SideSearch product. This success in traffic growth was a key factor in the successful sale of Lycos to Daum, a leading Asian Internet player.

Mr. Judd was Director Business Development of Fast Search and Transfer (FAST), a leading provider of enterprise Search solutions, and was an early competitor in the web Search wars of the early 2000s. Tim built the Internet Search division of FAST to the point where it became an attractive acquisition target and was acquired by Overture Advertising, which subsequently was acquired by Yahoo. FAST’s prior CEO and President, Mr. Ali Ruiz, is a member of Search Initiatives Board of Directors. FAST was sold to Microsoft in 2008 for $1.2 billion.

The Chief Operating Officer and Chief Financial Officer of Search Initiatives is Dr. Ralph Williams, who served several years with Ernst & Ernst (now Ernst & Young), an international accounting firm, in the firm’s Small Business Department. Dr. Williams has held executive positions as President as well as Chief Financial Officer in several fast growth companies. Ralph has been involved with financing, investing, and company executive management for over 25 years. Dr. Williams’ experience includes various positions with Sonora Venture Partners, USA; Lockheed Corporation, Ventura Capital Management, and the investment banking firm of Pacific Equity Development Corporation. Dr. Williams was part of the investment team that provided seed capital to PayPal.

Dr. Williams has owned, operated, and sold his own businesses and served on the Boards of Directors of several companies. Ralph has held professional memberships in the American Institute of Certified Public Accountants, the California Society of Certified Public Accountants, and the Institute of Management Accounting. Dr. Williams holds a Doctorate degree in Business Administration (DBA) from the University of Southern California (Accounting), a Master of Business Administration (MBA) degree (Finance) from Suffolk University, and a Bachelor of Arts degree from The College of The Holy Cross. Dr. Williams holds both CPA and CMA certifications.

Mr. Phil Collins is VP – Product Design. Phil has fifteen years experience in the design and successful deployment of advanced systems for the newspaper industry.. Mr. Collins brings a strong mix of newspaper experience and new media to Search Initiatives. He has led many successful product developments and deployments including the ground-breaking next generation advertising system at Do.

Mr. Bruce W. Barren, President, is the most recent addition to Search Initiatives’ executive team, is a proven corporate executive with over 40 years experience in involving some 200 diverse business of which a number of them were publicly-traded companies where he served either as an Executive Advisor or Chief Executive Officer. Bruce, whose accolades include those from the White House, the U.S. Congress, the Peoples’ Republic of China plus the Central American Parliament, is exceptionally well-known and highly regarded on Wall Street. He is also as an expert witness in a variety of important cases ranging from Class Actions to Fairness Opinions, to Business Valuations, to Executive Compensation, and to Business Turnarounds.

Historically, Search Initiatives and e-Local Listing had employed an outbound call center approach to attract sales. Until recently, e-Local Listing had managed to grow revenues with this call center as the primary means of customer acquisition. Because of the strength of its proprietary platform, e-Local Listing has signed agreements with the leading advertising agencies in the United States to provide exposure to its clients, and e-Local Listing eliminated its call center in 2010.
Another superb feature of e-Local Listing is its recently announced MyLocally, a revolutionary new online Directory that merges the best of Local Search and Social Media.

My Locally is a new and simple way for local businesses of all sizes to take advantage of the rapid growth of socially originated content and become findable on the local search engines.

MyLocally is free for the businesses to sign up for and use, In effect, it gives any business which wants to have one a modern and high quality local Website which is closely integrated with social media and most importantly, helps attract customers discovered in Search.

Businesses have had Websites for many years. Many large businesses and, increasingly, many medium-sized businesses, spend thousands of dollars each month keeping their sites current, and adding more ways for them to engage with their online audience and users.

It’s difficult, perhaps nearly impossible, for a local business with limited resources to do more than a modest online brochure. Even that can prove too much to look after and keep current. If a website never changes and is never up-dated, any appeal it may possess for the search engines will decline. MyLocally breaks through those barriers.

MyLocally allows any business owner to have an attractive, current, and relevant Web presence – which is free and can be set up and up-dated easily. The customers of the business can post reviews about the business, and the business can post to the major social media sites from one location. All of that activity greatly helps the business get found online, which in turn drives new customers to the business.

In National Search, the Battle for Market Share has been fought and won by Google, and to a much lesser extent, Yahoo and Bing.

National advertisers have adopted Search as an important new medium and have invested heavily. Search uniquely delivers customers who have expressed their precise intent to purchase.

The Search Giants have emerged as a de facto new advertising medium, the first genuinely new medium to emerge in the last 50 years. Anyone surveying the online landscape in the late 90’s could be forgiven for failing to guess that Search would be a largely unforeseen $32 Billion industry touching many aspects of the United States economy just a decade later.

The early players who focused on growing their user and advertiser bases have become legends providing exponential returns to their early investors. The national online advertising market is well established, and it is next to impossible to take a significant share of that market without enormous cost and risk. The LOCAL Search marketplace is a vast and rich ecology with plenty of room for remarkable growth for Search Initiatives and e-Local Listing with the right products and market strategies.

Unprecedented changes are occurring in the publishing and online Landscape. The Internet has revolutionized how people Shop Locally and how they interact with Local media. We regularly see the elimination of print titles and publications which have existed for decades if not centuries.
There is a reshaping of epic proportions happening in the Local Shopping Space presently. This change affords an Enormous Opportunity to Search Initiatives and e-Local Listing.

The Local Search Opportunity has resulted in a Battle for Top Position in search result queries leading to the emergence of two distinct business models. In addition to PPC (Pay Per Click), advertising, where larger companies buy prime exposure in Search through an auction model controlled by Google and Yahoo, Search Engine Optimization (SEO) has emerged where companies obtain good placement in Search query results through their relevance to the queries issued by end users.

Paid Search, predicted to be a $36 Billion market in 2011, has become the largest and fastest growing section of the online advertising market today, which is especially remarkable given the economic meltdown of 2009-2011. The rapid growth of Search is attributable primarily to two factors: (1) the cost of customer acquisition and (2) measurable ROI (Return on Investment) of advertising expenditures.

According to the Kelsey Group, the approximate relative cost of customer acquisition through Search Marketing is $8.50, whereas through the Yellow Pages it’s in the region of $30, and through Direct Mail it’s closer to $70. Paid Search is a performance based service whereby advertisers pay for visitors delivered to their site by clicking on a paid search term. Unlike banner ads, where the customer simply pays for each ad displayed, paid search delivers concrete results, referred to as “performance based marketing” and provides an easily recognizable return on investment.

Paid Search is expected to grow at a compound rate of 24% over the next four years (eMarketer). `
Central to the success of Paid Search was the emergence of an online auction platform which drives up bid prices and is an excellent indication of user intent provided by search terms. Initial deployments relied on end users entering search terms in search boxes. Over a period of time user habits solidified, and search became associated with specific search oriented destinations, such as Yahoo, Google, and Bing, to such an extent that more than 90% of all U.S. search traffic now occurs through just 3 locations. The Pay Per Click market (Search Engine Marketing or SEM) is well established and highly competitive with very thin margins, especially in the local space, and plays no role in the business model of Search Initiatives or e-Local Listing.

Alongside this Rapid Growth in Search Advertising, the Search Engine Optimization (SEO) market has continued to flourish. SEO is the process of gaining top placement in the unpaid, or “natural”, search results for targeted terms. Typically, this is a combination of art and science, where local listings are created on the main search engines, and where Websites are constructed so that they will gain preferential placement in search results.

This positioning improvement is obtained through optimized construction techniques and the acquisition of “In Links.” In Links occur where other Websites point or “link” to a Website. In so doing, they impart an increased authority upon the link recipient. The relative authority, or significance, of the site doing the linking is important. If, for example, BBC.co.uk, newyorktimes.com, or cnn.com were to point to a Website, that would generate significantly more rank boost than many in-links from smaller sites of less importance.

Traditionally, the SEO process has been intensely manual and focused on the medium to large size Website with a budget large enough to pay a specialist to get that site to the top of the Search for appropriate search terms and keep it there month after month.

Best estimates for this sector indicate SEO will top $10 Billion in 2011. !!!!! Again, the value of being “found” in the big search engines continues to become apparent. Even smaller advertisers are looking to become part of this trend.

From the overall point of view, there are two “products” here within Search Initiatives – e-Local Listing and (recently launched) MyLocally. Each of these products is geared towards helping small local businesses get “discovered” via Internet Searches.

The problem with the industry giant – Google – is that its model is not very relevant to most of the 27 million small businesses in the United States. These enterprises are generally not sophisticated enough, nor do they have the time or money to increase their Internet visibility and therefore their position on the local Search List. Most of them do not even have a Website and many who do were designed by non-professionals.

In summary, Search Initiatives and e-Local Listing provide these businesses with local SEO services, which include a handful of tools just like a custom landing page describing the business and its services, plus other online exposure that moves the business up on the local Search List. The merchant is charged on a pay per call basis. That is, Search Initiatives and e-Local Listing has technology that monitors the calls a merchant receives from the efforts of Search Initiatives.

Based on the experience of Search Initiatives, a typical customer receives 2 to 4 calls per month from their system. Depending on the merchant, (actually on the typical cost of customer acquisition among specific Merchant groups), e-Local Listing may get between $10 and $45 per lead.
It costs about $20 to set up each local merchant with the proper functionality – hence their need for additional capital because of their rapid growth.

Search Initiatives and eLocal Listings currently have a list of 1.2 local customers (generated by their partner affiliates) who would like to sign up for their service. At $20 per customer, an expenditure of $5 million would allow them to add approximately 250,000 customers generating between $360 and perhaps as much as $2,000 per year per customer. Just on the low end of that figure, at $360 per year per custome), the $5 million expenditure on 250,000 new customers would yield $90 Million in annual revenues. The companies estimate that gross margins will be 90% and that net margins will be 35%, about the same as Google.

In only four years, Search Initiatives has built one of the largest customer bases in the local search space.

The goal of e-Local Listing is to drive leads (calls) for these local businesses by employing its unique and proprietary, automated and fully managed, Search Engine Optimization (SEO) platform… Search Initiatives has a strong position in the U.S. market and recently completed a successful program in Europe with the Deutsche Telecom Group of Companies.

e-Local Listing is a leading provider of search-base, content-driven lead generation solutions for thousands of small to medium-sized businesses in the United States.

e-Local Listing provides easy and affordable solutions for business looking to improve their web presence without the need for a web site or a large marketing budget.

The results for Search Initiatives and e-Local Listing are astounding – with the majority of their customers obtaining strong placement on the first page of both Yahoo and Google.

Search Initiatives and its subsidiary, e-Local Listing, achieve these results through a combination of targeting markets, expertise, technology, and automation.

Search Initiatives and e-Local Listing also leverage the inherent strength of Their newspaper partners’ Web ranking to further enhance these results. The focus of Search initiatives and e-Local Listing is to make this process both as effective and as highly automated as possible.

Over the first three years of their existence, Search Initiatives and e-Local Listing have been able to develop their local Search Engine Optimization to the point where they can get almost any local business a good position in the major search engines with little or no human intervention.

Search Initiatives welcome investors, business owners, publishers, corporations, franchises, and resellers to take advantage of their technology and lead generation solutions to leverage the power of the Internet.

e-Local Listing , formed in 2007, is the coming together of a group of smart entrepreneurs with over 50 years of cumulative experience in technology, advertising, search, marketing, and web design. Couple that with some really smart product innovators, the rapidly growing Importance of Local Search, and a bunch of hard-working and dedicated staff, And you have the story of e-Local Listing.

e-Local Listing is made up of approximately 35-40 professionals, and since the company began operations in 2007, the company has established one of the largest customer bases in local online advertising.

e-Local Listing has put together a strong combination of technology and expertise to build a highly effective search visibility platform which brings online customers to local businesses through carefully crafted content and Search Engine Optimization designed profiles.

The technology of Search Initiatives and e-Local Listing drives calls and leads to local advertisers. At the core of e-Local Listing’s platform is a highly automated content management and publishing solution – Found Fast Technology , which takes basic information about a business and allows us To add unique and interesting content to create highly optimized marketing business profile pages specifically tailored to answer the questions posed by the end users of search engines.

e-Local Listings is an online marketing company based in San Diego, California focused on driving value to its publisher and agency partners.

Clients of e-Local Listings range from traditional SoHo SMBs to multi-location National advertisers.

The majority of e-Local Listing’s clients are ROI Pay Per Call based, and e-Local
Listing is paid on results e-Local Listing typically generates 2 to 4 qualified leads per month to traditional SMBs.

e-Local Listing works with many of the market leaders such as Marchex, Yext, ATT, IAC, and multiple Yellow Pages directory publishers.

Performance is everything, and e-Local Listing’s performance is governed by its search engines .It is able to target multiple cities for each location without local addresses. E-Local Listing targets head, body, and tail search terms which match the advertisers’ focus. Typically, it targets 10 keyword sets of “activity or product location”.

SMBs generate 50% of all revenue through new business. E-Local Listing generates 2 – 4 qualified leads per location per month, a great result for any business !

e-Local Listing has its own call tracking and performance dashboard, and it is used to working with large clients with their tracking numbers.

As a result, e-Local Listing is able to provision large volumes of clients and achieve great placement in SEPRS quickly across multiple markets and geographies.

e-Local Listing does not sell direct and does not seek to compete with its partners – it just delivers great results at large scale.

Another feature of e-Local Listing is My Locally, a revolutionary new online Directory that merges the best of Local Search and Social Media.

My Locally is at the intersection of Activity and Location. It is a site filled with original end user and partner generated content , such as – recent activity recycles and highlights content, – updates and deals from business owners, – tweets, blogs or messages from business owners, – tweets and reviews from end users, – questions and answers create a trusted local online community.

My Locally is the new virtual on line market place where business owners can Answer customer questions, post blogs, or tweet deals.

Consumers can ask questions, comment on blogs, post reviews, tweet, and follow their favorite businesses. The on line community creates trust and repeat business.
Social content drives search visibility.

There are many great ways to earn money for partners of e-Local Listing – Pay per call – businesses can upgrade to e-Local Listing other platforms.

• Upgraded listings – featured or regional upgrades

• Display revenue – Share in the revenue when a display or banner ad is displayed on partner “adopted” pages.

• Deals and Coupons Share in the revenue from deals and coupons.

• Market Sponsorships – Target display ads for category specific market place pages.

Readers of this report may want to talk to management of Search Initiatives LLC and its wholly owned subsidiaries: e-Local Listing and MyLocally. Please contact: Bruce Barren 310 405 3393 or by email: bbarren@verizon.net or Ralph Williams at 562 412 8526 or by email: ralph.williams@elocallistings.com

Readers who would like to reach Ray Dirks personally are encouraged to e-Mail him at the following address: rdirks@nyc.rr.com Thank you

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