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