Aptas, ISX, YPsolutions Form Local Matters

Three technology firms serving different segments of the online directory and local search space have merged in the interest of broadening their collective base of customers and extending the range of services offered. Aptas, recognized for its work in extracting and organizing Yellow Pages ad content into a searchable database, has gotten together with YPsolutions, which offers both look and feel online publishing and a standard search-based IYP platform, and ISX, which enables data for delivery in a voice and wireless environment. The new firm, called Local Matters, made the rounds of recent industry conferences to "soft launch" the new technology brand.

Perry Evans, the Aptas founder who is leading the new venture, discussed the merger with The Kelsey Group at our recent Drilling Down conference in Santa Clara. He said the three companies offer complementary technologies and together create a complete solution for "local digital infrastructure." Evans believes this is a huge opportunity that requires a "well-funded leader" to execute.

Aptas and YPsolutions bring together different customer sets. Aptas counts among its customers Dex Media and the Australian publisher Sensis, while YPsolutions’ clients include R.H. Donnelley and Phone Directories.

ISX is clearly part of the mix to create technologies for publishers to launch viable voice-enabled directory services. ISX powers the Sensis 1234 DA service in Australia, among other projects. Evans believes the shift from consumer pay (the current DA model) to more ad-supported services is coming soon. He expects to begin seeing some initial product rollouts in the "hybrid voice-Internet" space beginning in 2006, and he expects his new venture to be part of that progression.

Voice remains a longer-term opportunity — maybe three to five years before the big payoff. The near-term benefits of the merger include collective stability from sharing infrastructure and funding sources. YPsolutions and ISX will certainly see a boost in R&D exposure, since Evans notes Aptas was spending between US$8 million and US$10 million on R&D. Cross-selling is another clear opportunity. Aptas now has a established base of customers in the independent segment that it could conceivably upsell with a broader mix of technology products. Evans notes that YPsolutions has developed technologies that are well targeted to smaller publishers, including the ability to take a PDF file and transform it into searchable content.

Broadly speaking, the opportunity comes from offering a full range of solutions for publishers looking to enable their business to complete in the local directional media space — offering searchable data, performance-based pricing and a seamless multi-platform delivery of advertising content.

Local Matters combines into a company of some substance, with 40 customers and installations in about 18 countries, with 150 employees, Evans tells us. The new company will maintain current staffing and independent organizations through 2005, but a long-term reorganziation is inevitable, and no doubt necessary to extract all available synergies.

The Aptas board will become the Local Matters board, which includes former BellSouth A&P President Don Perozzi and former R.R. Donnelley CEO John Walter.