Main Street Connect, the network of hyperlocal news sites, announced yesterday that Thompson Reuters’ Global Head of Product Management Zohar Yardeni would come on as CEO, replacing founder Carll Tucker who will become chairman of the company’s board of directors. The company also announced $7 million in new funding, matching an inaugural round raised a year ago.
The decision to make a change at the chief executive post appears to have been spearheaded by Tucker, who returned to the local space in 2009 after selling his print business to Gannett a decade earlier. “The CEO search was my recommendation to the board,” Tucker told Street Fight in an interview. “I just turned 60 and this company belongs to the future.”
Before joining Thompson Reuters in 2009, Yardeni founded Call Street, an earnings call transcription services that was snapped up in 2004, and RadiusIM, a location-based SMS that fizzled out in 2009 after failing to score an acquisition. Yardeni’s combination of start-up and institutional experience was a big factor in the decision to bring him on, says Tucker.
The funding round and the CEO search appear to have taken place independent of one another, but both fit squarely into the company’s aggressive growth strategy. Speaking to an audience at the Street Fight Summit last week, Tucker said that the second round of funding came largely from a handful of private equity firms, who staked the company in its first round of financing a year earlier.
Tucker believes that the influx of cash and change in leadership will not affect the company’s growth strategy, which centers on achieving profitability in each pod — a cluster of sites — before expanding into new territories. “We’re still completely committed to not mass produce a vehicle until the wheels come off,” said Tucker, reiterating a phrase he used to draw contrast with Patch’s model during a panel at the Street Fight Summit.
The regional focus of the “pod” is at the core of Main Street Connect’s monetization strategy, which is staking its success on large, regional accounts like hospitals and car dealerships that rely on local branding for competitive advantage. Regional branding accounts allow the company to keep sales cost down and avoid what is becoming an increasingly competitive local advertising landscape, with a host of marketing solutions boasting far more complete ROI metrics than the typical banner ad.
The question for Main Street Connect will be whether the company will remain committed to the profitability-before-scale model of growth under a new leadership and with a lot more cash on hand.