A Bullish Take on Local.com’s Patent

Here’s a Seeking Alpha post — and thoughtful analysis — about why Local.com’s patent might be stronger than the broader Geomas patent. The author, John Gilliam, likens Local.com’s position potentially to that of Qualcomm, which holds a recognized IP portfolio, in the wireless segment. The challenge is getting others to recognize the validity of the patent without engaging in expensive litigation and appeals.

I had argued that 1-800-Free411’s patent announcement may be a stealth effort to accelerate a hoped-for M&A process (though the company would certainly dispute this). Gilliam suggests something similar for Local.com:

A key question is whether LOCM can afford to take on some of the industry’s deepest pockets. LOCM does have a pretty stellar balance sheet for such a small company. It is very rare for a company with a $35 million market cap to have $10 million + in the bank, but LOCM does. With only a very small debt load that leaves its net cash approaching $9 million, it does appear that LOCM could go that route, possibly long enough to extract a significant enough sized settlement that could allow them more resources for litigation against the others. The better question is whether that is the best route to take, as LOCM shareholders might not be patient enough for that approach. Considering the recent flurry of deals among the search elite, they may not have to. As we see more and more deals with ever higher price tags, it would come as no surprise if Google, Yahoo or MSN ponied up to buy LOCM.

One Response to “A Bullish Take on Local.com’s Patent”

  1. How Enforceable Are the Local.com Patents? « Screenwerk Says:

    […] Enforceable Are the Local.com Patents? I had a reader contend, in response to an earlier post, that the first Local.com patent “was not defensible.” The issuance of the second […]

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