First, as indicated, national advertisers do want to reach these markets, but there can be a shortage of local media; these nationals also want to be seen as local, but be able to implement on national scale. And yes, local residents do tend to know what new businesses have opened, so a business listings site may not add that much value beyond the yellow pages.

But rural communities are very active on a local level, and often exhibit high levels of civic energy. As a result, we often see very high levels of household participation (10% and up) in our local sites for these communities, where people want to know what community activities are going on and to be part of them. In fact we are increasingly focusing on those towns where we have gotten the greatest local participation, which has actually helped our monthly traffic jump 50% during Q1. And we see comparable community interest in newer “ex-urban” areas, even though some of the civic traditions aren’t as well established.

With national scale to make good technology affordable on a per town basis and the ability for advertisers to pick exactly which town they want to advertise in, these smaller towns can be perfectly profitable for the publisher as well.

(Peter, we’ll be releasing Q1 metrics next week, which should demonstrate much of the above.)