Hyperlocal Investment Report Debuts Stock Index, Sees Dip in Valuations

Hyperlocal stock performance was largely on an upward trend in July, according to the Hyperlocal Stock Index which debuts in the latest issue of Street Fight’s monthly newsletter The Hyperlocal Investment Report. The greatest gains were made by DexOne, ReachLocal and AOL, while Groupon and Facebook suffered staggering losses, and Angie’s List failed to reverse its downward trend.

Each month, Hyperlocal Investment Report editor Steven Jacobs presents key insights into the hyperlocal sector that have long-term implications for startups and investors who are active, or looking to be active, in areas including hyperlocal content, location-based services, daily deals, local search and directories.

The August issue takes a close look at what AOL CEO Tim Armstrong is calling Patch’s “phase two” strategy focus on revenue diversification beyond the traditional media model. Foursquare’s monetization efforts are also analyzed in the context of a “buy-side bottleneck.” And daily deals publishers’ move toward general e-commerce is evaluated as a short-term win and a long-term death knell. As well, contributor Architect Partners picks apart Amazon’s $2.5 million acquisition of UpNext.

New contributor Todd Van Fleet, an analyst at First Analysis, reports on a drop in valuations for hyperlocal companies as investors display wariness over growth potential. “Investors recognize revenue and earnings streams of hyperlocal companies are similarly dependent upon an ability to monetize relationships with two key digital ecosystem constituents: consumers and/or advertisers. Most business models in the space seem to find their path to monetization through advertisers so investment analysts tend to spend their time continually reviewing any available financial and operational metrics to assess discernible trends in advertiser adoption of a given platform.”

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