Yext: ‘Like a Google Voice for Local Businesses’

Picture 135I finally watched the Yext demo from TechCrunch50. The technology (identification and transcription of relevant keywords w/in calls) was impressive. The company has been around (originally as Alpha411) since 2008 and is changing from a PPCall model to a “pay per action” calls model (a subset of calls received).

The critique Yext offers of PPCall online is valid (spam calls get through, not enough volume). So now it’s only sending a subset of calls to advertisers, who can see transcripts and presumably listen to recordings of those calls. Irrelevant calls wind up in a spam folder but can also be examined if desired. Only “awesome” calls (leads) are billed to local merchants. Indeed, the word awesome is overused in the demo.

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The company says that it already has 20K advertisers is generating $20 million in top-line revenue. The call volumes are apparently generated through IYP distribution partnerships and via Google SEM (on behalf of Yext itself). The company doesn’t resell SEM to local advertisers. However they employ the same pitch to SMBs: we’ll be your onramp to the broader Internet. Listed partners include YellowPages.com, Local.com, Topix.

Here are the two programs Yext offers: one for businesses and one for third party publishers. The company apparently has a direct sales force and claims “very low churn rates.”

The best question of the follow up panel segment was asked by Google’s Marissa Mayer who wondered about Yext as an IT platform vs. an advertising platform with a consumer aspect.  She was suggesting that the company should offer its services to others who in turn sell to SMBs. She also pointed out correctly that the “core innovation” Yext appears to have developed is the merchant calls in-box and the related categorization and analysis of calls.

It seems that despite the startup label Yext is already a success (if the revenue and merchant numbers are true). The simple math indicates advertisers are paying on average $1k annually for the service.

Yext will probably eventually be acquired, as Mayer suggested, for its platform capabilities. This is largely what happened with Ingenio and AT&T. That acquisition was reportedly north of $300 million, but Ingenio also had a big revenue generating business in Keen, which drove the overall price up.

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Some of the comments on my earlier RedBeacon posts suggest that a winning combination would be a “mashup” of that site with Yext.

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7 Responses to “Yext: ‘Like a Google Voice for Local Businesses’”

  1. Howard Lerman Says:

    Awesome article, thanks Greg! :)

  2. Rich Rosen Says:

    The Yext presentation was an awesome use of the word awesome! The challenge in pitching a local solution is the enormity of the opportunity and complexity of the needed solutions. The panel’s questions demonstrated why pitching local search is so hard. Marc Andreessen didn’t seem to agree that local businesses want phone calls and not clicks. Marc asked about emails – seeming to question why any business would bother answering their phone when they could respond to email (btw, Marc many merchants do not answer the phone and that’s part of the problem). The questions rolled over to categories and again illustrated the unique challenges in local (2000+ categories)

    I agree with Yext that leakage and dirty calls are a real problem with ppcall. My company, FastCall411 uses parallel dialing as one potential fix – not only to connect to multiple merchants but more so to capture connection rate data on multiple merchants. Find out who will answer the phone (and wants the lead) and each future call is more efficient. Yext is using analytics to examine key words. This is very clever and hopefully not too complicated (I’d hate to try to explain it to a local merchant). Merchants want good clean calls and Yext is clearing the way for innovative solutions in this market.

  3. Mihmorandum | Links of Local Interest, Volume 9B | Links of Local Interest Says:

    [...] Greg Sterling reported on Yext after seeing a presentation at the TechCrunch 50 a couple of weeks ago. [...]

  4. Yext Scores a $25M Round of Funding « Screenwerk Says:

    [...] Scores a $25M Round of Funding By Greg Sterling I guess presenting at the recent TechCrunch conference was a big win for Yext, to the tune of $25 million. Reportedly the money will be used to hire sales [...]

  5. heather Says:

    I’m sorry to be the bearer of bad news. But our company is highly unsatisfied with YEXT. We have been working with them for a few months now. The first month we received 6 phone calls. All of which were placed in our “qualified” inbox, but were either sales calls or junk calls. I was not told upon signing up for Yext that I needed to personally monitor each call received through Yext each month. $150 was debited from our credit card on the first. We paid $150 for soliciation and wrong numbers calling our office.

    Upon calling to correct and receive a refund for the $150, I was told that they do NOT give refunds but can credit the amount towards future calls. We had decided to cancel the service because it did NOT generate any new leads. They will not issue refunds so we are forced to continue with Yext until our $150 credit runs out. Was told “You’ll just have $150 sitting here whenver you decide to come back to us”. They informed me that in order to avoid the same thing happening again, I needed to call or email each month before the first of the month to tell them which calls were junk. On top of that, they still debtied $10 the first of the next month for the service instead of using our credit. We did not realize upon signing up that we’d have to monitor closely this service.

    Please note this before making the same mistake we did. I just checked our calls for this month. We paid for 2 existing patients that looked up our name and wanted to reschedule their appointments. Something that shouldn’t cost us $25 per phone call.

    Highly dissatisfied that the customer service could offer no way to fix the problem.

  6. Greg Sterling Says:

    Thanks for your comments.

  7. Yext Is for Real « Screenwerk Says:

    [...] specifically asked about the $20M revenue figure floated during the recent TechCrunch event in which Yext had a bit of a coming out. Many people I speak with don’t believe that the [...]

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