I’d be willing to bet that this really has more to do with the fact that, in a slowing economy, they needed a product offering that costs a lot less than their usual SEM campaigns in order to have ANY kind of revenue stream at all.

Bottom line: a VC-backed company should be at the forefront of NEW technologies and product offerings, not coming late to the same-old products that have been around for years. Otherwise, how DO they plan to differentiate themselves from their very real competition?

I get why ReachLocal wants to leverage its sales force — but making this move, at this point also means they probably are running out of SEM steam.

There simply are not infinite Google clicks to re-sell, especially when you and other re-sellers are essentially bidding each other up (so much for margins).

Good luck to Reach on this effort. They enter a very crowded sales field — and offering one order, one bill “ease” is not as much of an advantage here or all the existing local sales networks would be doing better.