It’s been nearly a year since Yext announced a massive round of funding and SinglePlatform sold to Constant Contact within a week each other, and the value proposition for a real-time data and content network continues gain steam. As both firms put that capital to use, a third company, Locu, is trying to carve out its own share of the market with a similar model and sizable — albeit smaller — stack of cash.
Locu launched in 2011 focused on digitizing and distributing restaurant menus to local publishers across the web. The company has since expanded to other types of information like business name and address, and has steadily built out the roster of publishers on its network as well. Over the past two months, the company has announced new partnerships with Yelp and Foursquare, and today, has added website builder and domain registrar GoDaddy to that list.
The partnership, which was announced in May but rolled out this morning, adds Locu’s widget to GoDaddy’s website builder, allowing users to create an account with the startup without leaving GoDaddy’s workflow. It’s a move that will open up a sizable chunk of GoDaddy’s 11 million domain clients for Locu, and position the company to grow its network, and subsequently improve its pitch to publishers, without hiring a single salesperson.
From a product perspective, Locu’s concept is nearly identical to its competitors. The company is built on two technologies: one to convert information (e.g. a price list or menu) into structured data, and another to distribute that data across a network of publishers in real-time. That information is either integrated into the publishers existing format or appears as an embedded widget in the page.
What has differentiated these firms is the ability to negotiate and execute integrations with some of the larger, and slower moving, publishers in the space. But that’s starting to change.
“When we started, we were spending a lot of time educating publishers on the value of having fresher and more accurate content,” says Reinsberg. “But now it’s increasingly the other way around. We’re getting approached by new partners almost every week. There’s definitely a trend among publishers to open up.”
That opening up however, could also lower some of the barriers to entry in the space, creating opportunities for new startups to build out similar products. Yelp, for instance, has already rolled out integrations with Locu and SinglePlatform this year, adding to the reviews sites longer standing partnership with Yext. The bigger threat would be if the larger publishers began building out a write API, which allowed merchants to manage their information through a third party.
As the value shifts, and more competition emerges in the marketplace, the economics of the business will change too. Today, the amount which these companies pay, or are paid by, publishers to include their content on a site varies on a case by case basis. If there are more services like Locu and Yext lobbying publishers to distribute content, it would reason that the market will shift in favor of the latter.
The underlying question is whether Locu and Yext can turn the publisher network from a feature into a standalone business, or if SinglePlatform’s decision to sell to Constant Contact will prove correct in the long-run. With the GoDaddy partnership, Locu has demonstrated the potential for the publisher network product to become a critical cog in the local marketing solution machine, positioned next to other mainstays like SEO and website building. And, who knows, if it works out we might see another acquisition.
Steven Jacobs is Street Fight’s deputy editor.