Yext Spins Off Pay-Per-Call Service

Local search company Yext has spun-off its original pay-per-call business into an independent division called “Felix” in order to focus exclusively on its local information sync product PowerListings, according to a spokesman. Co-founder Brent Metz will head the pay-per-call (PPC) business and Howard Lerman will remain CEO of Yext.

After launching in 2009, the New York-based company soon pivoted away from its original PPC play to build its PowerListings product in 2010. Lerman told Street Fight in an email that the discussion around spinning of the pay-per-call businesses began in 2011: “The explosive growth of PowerListings made this the obvious thing to do and the board said to throw all our weight behind it. “

The news comes on the heels of a new partnership with one-time competitor UBL announced last week, which brings Yext’s PowerListings technology to UBL’s listings and SEO management product. Though Lerman says that there is “no relationship” between last week’s partnership and today’s announcement, the two appear to be equal parts of the same strategic push as the company looks to scale in in the wake of a $10 million series D round raised last July.

Though pay-per-call inventory increased 348% from Q1 of 2011 to Q1 2012, according to a report by advertising call measurement solution Telmetrics, the PPC market is far more competitive and does not provide the kind of growth potential that justifies venture investment.

With the pay-per-call baggage left behind, look for Yext to make a big push to tie into local marketing products like UBL as well as to leverage the existing sales forces of the legacy yellow pages businesses to sell its product. Though the company’s plans to expand the PowerListing product itself remain unclear, it would not be surprising to see the company expand the sync technology beyond basic business info to other types of local information.

Steven Jacobs is an associate editor at Street Fight.

  1. Ak
    April 9, 2012

    REALLY, get some perspective. Who spins off a division with 300% growth

    1. Howard Lerman
      April 9, 2012

      We did.

      1. Rxforbiz
        April 10, 2012

        That’s an arrogant and stupid response from a CEO

        1. Daphne Earp
          April 13, 2012

          Or, it’s just true! Yext will continue to focus our efforts on the most innovative and challenging projects in the local space. This determination frequently comes at the cost of making risky decisions, just as spinning off Felix. 

          Confidence in our decisions should not be mistaken for arrogance.

          1. Laura Rich
            April 13, 2012

            Daphne – 

            Great link! Go bold or go home.

            It seems there used to be more talk in the Valley about the old maxim of failure as a badge of honor, which is part of what the piece gets at: That you must take risks to succeed. Of course, in the long shadow of bank failures, perhaps “risk” has taken on a new, less exciting hue. 
            Long live “overconfidence”!

            Street Fight

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