Local.com’s stock value has gone berzerk after the news hit over the holiday week of the local search company being granted a US Patent for advertiser supported 411 directory listings in text messages.
On Monday, Local.com was awarded patent number 7,200,413 by the U.S. Patent and Trademark Office. The patent is for the method of responding to enhanced directory assistance inquiries using various protocols including voice-enabled and SMS systems. The patent also covers an associated referral advertising model, which is designed to monetize those local searches.
Sure many search companies are awarded patents, but the Local.com patent encompasses many existing business models by companies such as Miva or Free411, and possibly Google which already has its own voice activated business directory for telephone users which sends results to the user via SMS.
Such companies will now have to obtain licenses from Local.com in order to continue to offer these advertiser based services.
Wall Street jumped today at the Local.com patent news as their stock value shot up over 45%, from $9 a share to a high of $13.
“In our view, the burgeoning free 411 marketplace is being underwritten by a variety of advertising supported models. Our patent 7,200,413 is directly related to a referral advertising model such as pay-per-click or pay-per-call listings, which are delivered to consumers as a result of an enhanced directory assistance inquiry or local search, where the results can be provided to consumers via many mobile channels, including voice,” said Heath Clarke, Chairman and CEO, Local.com.
The awarded patent covers a system and method for providing businesses with referral advertising opportunities (such as pay-per-click or pay-per-call) utilizing directory assistance and wireless messaging systems.
The model enables businesses to receive search leads on a pay-per-referral basis when their listings are included in a set of search results provided to consumers as a result of an enhanced directory assistance inquiry. The results are delivered to consumers via operator assisted calls, messaging systems such as SMS, WAP, automated voice-enabled systems, or any combination of these. Advertiser listings in this model can be organized by location, referral amount paid, and keyword association.