MerchantCircle: 5,000 Paying Customers

MerchantCircle, which is partially owned by IAC, is apparently beginning to make some headway in selling search oriented services to small businesses. It reports that it has achieved a base of 5,000 paying customers, who buy services costing $30, $60, $100 and $250 a month. “Most of them are coming in at the lower end” — the “starter circle” package — “but we do have customers at all price points,” said a spokesman.

The company also has 500,000 “registered” users and hopes to have 1 million registered users by the end of the year. Darren Waddell, VP of marketing, estimates that 75 percent to 80 percent of its users have no other Web presence. “They rely on us as their only Web presence. And all the people buying advertising for us, it’s more like 85 percent that have never purchased online advertising before.”

Waddell asserts that the site’s best customer acquisition vehicle is “people bringing in others by word of mouth. Another way people find us is with vanity search. Someone searches for themselves and see they ranked highly and say, ‘who is that? Who built a Web listing for me?’ ”

Indeed, MerchantCircle has prepopulated 15 million merchant listings, which users can enhance with MerchantCircle provided blogs, newsletters and other customer interactions. “We get their listing highly indexed with Google, Yahoo!, MSN and Ask.com,” says Waddell. “So we’re using search as a front door.” Next on the agenda is an upgrade of the listings to videos made with templates. Similar to SpotMixer, such video might be category specific and allow businesses to see what they can do with video as a hook.

Another way that people find the company, of course, is more notorious — an aggressive auto dialer campaign that compels people to go online to register in order to see what someone has allegedly said about them. The company downplays the importance of the campaign, but many people are still apparently receiving the calls.

I have actually gotten many e-mails from irate businesspeople who have received such calls and wanted to vent. Here is one e-mail I got from “Dave” on May 15.

“I received one of the MerchantCircle automated calls in my voicemail box this morning. It said ‘Hello, this is the MerchantCircle Verification Department. We are calling regarding a customer who found your MerchantCircle Page on Google. On Monday, May 12, 2008, this customer asked us to verify that you are indeed a legitimate business. To verify your business, go to MerchantCircle.com and enter your business telephone number in the blue box. Again, that’s MerchantCircle.com. Thank you.’”

But Dave notes that “we do not have a MerchantCircle Page and do not intend to have one.” He may have been unaware, however, that MerchantCircle automatically generated a page for his business. (But who is the mystery customer?)