ILM:07 – Marchex

6 Dec
2007

I’ve been relatively quiet on ILM:07 as I’ve been busy digesting information and getting a chance to reflect on it.

When I came across the Marchex Internal Strategy Memo I couldn’t help but laugh.

So on Day 3 we had “Keynote Address: Marchex and the Vertical Opportunity in Local” It was a decent talk – of everything, what really boggled my eyes was the claim of 25,000,000 unique visitors a month. Not even SuperPages.com, YellowPages.com, etc can claim that.

There was the talk of the difficulties of local data – on how the struggle is both with breadth (quantity) and depth (quality) of data. The approach Marchex has taken is via its acquisition of OpenList – scraping other sites for information and mixing together into coherent text. The talk basically focused on building out various verticals, Marchex’s collection of domains (thus providing them instant traffic), and selling local ads on all these sites (no need to start over – just convert current salespeople into selling online ads).

Overall though – I have to agree with the faux internal memo linked above. I previously mentioned it, but there are a ton of questions I would love Marchex to address:

Why bother building out all these domains individually? Why not aggregate all the traffic into one stronger brand? You may lose out on the SEO value of each domain, but with replicated content galore, it seems to be on a rather shaky foundation again

What exactly

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is Marchex doing with all the other domains they own? Especially non-US geodomains that are just sitting around (eg Beijing.com)

How is the ZIP code blog panning out? (for those that don’t know, Marchex is experimenting on using its ZIPcode.com domains as local blogs)

While the above memo is poking fun, it does have a legitimate point. Your domains alone are arguably worth your market cap (~$500 million). Sahar says .com went up an average of 311% from 2004. Marchex was founded in early 2004 by purchasing Yun Ye’s collection for $165 million. 165 million x 3.11 = $513.15 million. So it actually seems like their portfolio alone is worth more than Marchex and all of its assets. So – why are you guys going sideways (or even arguably down) and not up?

Are you concerned about impending Demand Media IPO?

Will you ever start selling off any of your non-local domains?

Just a few question to get started :)

I like what OpenList is trying to do, but I fail to see what Marchex is trying to do – redirect the domains to their respective parts of OpenList (or a new brand), build some good SEO structure, and go from there. What you guys are doing (so far) doesn’t seem to add up.

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