Marchex Buys Openlist

Search and contextual marketing provider Marchex has purchased the assets of Openlist for $13 million in cash and Marchex common stock. As part of the deal, Openlist CTO Matthew Berk will join Marchex as a full-time employee. I’ve been a fan of Openlist since its launch as Local-i a couple of years ago. The site was built by a very small staff, purely through aggregation.

Berk and I have had an ongoing conversation about search and local search in particular for the past couple of years and I think he’s doing some of the most nuanced thinking about the user experience and how to make it better. I think this is going to be very interesting for both companies: Berk and crew will get more resources to build out the next generation of their product and Marchex will get some very valuable tools and technology to improve the quality of its domain network and the range of services it can offer to partners (e.g., YellowPages.com and Houston Chronicle).

Local targeting and local leads convert better than general paid search ads. But the combination of local and vertical presumably makes and even better lead (e.g., NY Hotels, SF Restaurants, etc.)

The Openlist technology, which is actually more of a methodology, will help beef up the thousands of domains that Marchex has been building and populating with advertising. Add the Openlist navigation and aggregated user reviews to those sites and you start to have something this is much more interesting and meaningful. Here are a few of examples:

• Newyorkdining.com
• 90210.com
• Burrito.com
• Bostonmotels.com

The better these sites get and the more leads they deliver, the more Marchex traffic acquisition costs come down. Marchex's TrafficLeader product is behind the simplified search offering being packaged at YellowPages.com (and affiliated companies) and the Houston Chronicle.

Beyond simply making these domains more rich and giving them real content, there’s a great deal more here that’s possible over time. The thinking about vertical and local search that Openlist has done and the content the company has been able to aggregate with a very small staff has made it one of the most interesting sites in Local to watch.

What Openlist is really is a platform; and Marchex may start offering those "platform" services to existing and potential partners. Openlist has been working with the NY Times Co. at Boston.com for a couple of years. Here’s an interesting local travel site they jointly produced. There are many more such potential opportunities out there (esp. for newspapers).

Marchex is also an impressive company in terms of how it has made a slew of acquisitions, including IndustryBrains, and how it has aggressively pushed into Local. With Openlist, Marchex can now move out in several different directions simultaneously. And it will be interesting to see how the company leverages Berk’s thinking and the Openlist platform and approach to search.

Here's the release.