RHD Makes Strategic Choice With LocalLaunch Acquisition

We just got off the phone with Sean Greene at R.H. Donnelley who walked us through the rationale of his company’s acquisition of LocalLaunch, which was announced earlier today.

We will explore the deal in next week’s Local Media Journal, but here are a few highlights from our chat with Sean:

* Search engine marketing is a key piece of RHD’s future growth strategy, and the publisher believes it is better to own than partner for such a strategic component of its business.

* The economics of SEM make more sense to RHD with fewer intermediaries marking up clicks along the way.

* RHD remains committed to IYP and its efforts in SEM are not at the expense of IYP. Greene sees the two as key elements of what the publisher can offer, and it wants to own both pieces.

* RHD believes it can manage the supply and demand dynamics of local search distribution more efficiently through its own assets, rather than a partner’s. The company recently had to dial back sales of its clicks product because of fulfillment challenges.

* LocalLaunch will retain its individual identify and will continue to serve other players, including RHD competitors.

The terms of the deal were not disclosed, but we do not think RHD paid very much, since the amount was not considered material and did not require disclosure.