Local sales leaders are now jumping into the deal-a-day phenomenon. Yesterday, Citysearch said it would push deals hard to its thousands of advertisers. Today, ReachLocal announced that it was buying DealOn Media. Specific terms weren’t disclosed, but ReachLocal is valuing DealOn at $10 million. DealOn will be keeping its name for now, and CEO Rich Razgaitis will become GM of Reach’s new deals division.

DealOn operates in 18 markets and is based in New Jersey. The 30-person company — of whom 20 have been sales — provides white-label services for publishers and has done especially well with restaurants, powering Zagat Exclusives and Nation’s Restaurant News, among others. It recently launched an exchange for offers that permits publishers to pick and choose the best offers for their users. More than 20 partners were using the exchange after its launch in December. Exchanges are clearly hot right now, and becoming central to the strategy of several white-label providers.

The deal with DealOn continues Reach’s evolution beyond being a simple search reseller. Suffering from high churn last year, it began an effort to provide its advertisers with a variety of engagement tools via its acquisition of SMBLive, and social networking tools via Bizzy. The connecting point is Reach’s 700-person-strong sales team.

ReachLocal CEO Zorik Gordon told ClickZ that he expects that the company’s deal flow will be helped via partnerships with pure plays such as AOL, Yahoo, Google, Yelp, OpenTable and travel sites. Traditional publishers, however, are less likely to participate, he says, as they still see ReachLocal as direct competition.

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With destination sites, white-label providers and aggregators all crowding into the deal-a-day space, the struggle to differentiate and scale is complex. DealOn, which operates its own group buying sites in 16 markets and also offers white-label branding, thinks it has uncovered two ways to rise above the noise: verticalization and an offer network.

CEO Rich Razgaitis told BIA/Kelsey that DealOn has developed an early “lock” in restaurants, one of the most popular deal verticals. As Zagat’s white-label solution, DealOn powers deal sourcing and post-transaction processing for Zagat Exclusives (heady savings on premium, Zagat-rated local restaurants) while also integrating these offers on its own sites. A similar partnership with Nation’s Restaurant News gives the 70,000 restaurant SMBs represented by the portal access to DealOn’s suite of services. DealOn isn’t alone in the restaurant realm, however, with OpenTable having hatched a successful deals platform. Food-and-drink heavy reviews sites such as Yelp must also be contended with.

Once deals are developed, they can be fed across DealOn’s OfferEx network. This exchange relies on an open API to connect deal suppliers with resellers and distributors. Providers achieve greater reach on their deals, while publishers with existing content management systems can integrate deals that fit their markets and audience demographics. Razgaitis noted that this could be most appealing to publishers that “want the ability to sell into the system [and capture consumer on their sites], but not be limited by it.” Tippr and Local Offer Network are also players in deal distribution.

To date, more than 20 partners are integrating deals through OfferEx. Most offers are supplied by DealOn, but the company is hoping to enlist more outside deal sites.

DealOn has a feet-on-the-street sales force totaling 20 (an average of one per market), backed by telesales. The company believes that personal sales are critical at this still-early stage in order to better educate SMBs on the value of participating. Down the road, however, Razgaitis envisions a self-service marketplace where merchants can self-select creative, geography and timing and then serve up their deals for distribution across the network.

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