Two businesses doubled their year-to-year revenue from 2007 to 2008, thus earning entry on the Business Journal’s list of largest private companies.
The list, which each year ranks L.A.’s 100 largest private companies by 2008 revenue, is published in the October 19 print edition and is available for download online.
Separate driving forces propelled the two new entries: Goldline International Inc. benefited from rising value in the precious metal market, while ReachLocal Inc. took advantage of the boom in Internet advertising.
Goldline, a Santa Monica-based trader of gold and rare currency, made its first appearance on the list at No. 30. The company brought in $525 million in 2008, almost double its revenue from the prior year.
Goldline’s bottom line has been buoyed by the skyrocketing price of gold, which soared during the economic crisis and continued to climb this year, hitting a record high of more than $1,067 an ounce last week. Precious metals in general have seen their value climb as investors, skittish about currency fluctuations and stocks, seek a refuge for their money.
That’s all been good news for Goldline, which also sells silver and other precious metals to collectors and investors. But much of its business is tied to gold coins and bars, which Goldline buys from wholesalers and refineries, and stores in secure vaults around the country.
“A positive gold market does allow the company a more favorable growth environment,” said Mark Albarian, Goldline’s president and chief executive.
But Albarian chalked up another reason for Goldline’s growth: The company recently doubled the number of account executives who work on Goldline’s trade floor. That allows the company to process more transactions – and reap more revenue.
Also debuting on the Business Journal’s list, at No. 77, is ReachLocal, an online advertising firm based in Woodland Hills that took in $147 million last year. That’s more than double its 2007 total of $68.4 million.
Since it was founded in 2004, ReachLocal has enjoyed explosive growth by carving out a niche market: small businesses. ReachLocal employs hundreds of salespeople who go door to door to convince neighborhood mom-and-pop stores to buy online advertising. ReachLocal then helps those businesses place the ads on Web sites and allows the advertisers to monitor how the ads perform.
The company’s local focus gives it an edge in a competitive industry that is growing in spite of the recession. Emarketer Inc., a New York-based research firm, projected that Internet advertising in the United States would grow to $24.5 billion this year, up from $23.4 billion in 2008.
While Internet behemoths such as Google Inc. and Yahoo Inc. dominate the online advertising market, their products aren’t aimed at small businesses. That’s opened the door for ReachLocal, and the company has walked right through and is cashing in.
In 2008, ReachLocal opened 18 sales offices around the world and also rolled out a product that allows clients to buy display and banner ads. (ReachLocal had previously limited its offerings to text ads.)
“We’ve really had a two-headed focus on reaching deeper into local markets, and wider by offering more products and services,” said Zorik Gordon, ReachLocal’s chief executive.
Many similarities
Other than these two noticeable entrants, the Business Journal’s list was relatively unchanged from last year’s.
Platinum Equity, a leveraged buyout firm run by billionaire Tom Gores, retained its hold on the No. 1 spot with $11.4 billion in revenue in 2008. After a spate of acquisitions last year, Platinum has made headlines this year with its failed bid to buy auto parts supplier Delphi Corp. and its successful purchase of the San Diego Union-Tribune.
One prominent company that dropped off this year’s list: general contractor Tutor-Saliba Corp., which was previously No. 29 and merged last year with publicly traded construction management firm Perini Corp. Shares in the joint entity, renamed Tutor-Perini Corp., currently trade on the New York Stock Exchange.
Next year’s list could see more drop-offs as local companies test the IPO waters. Murdock Holding Co. may report lower revenue next year because it spun off fresh food supplier Dole Food Co. Inc. as a publicly traded company last week In addition, Internet retailer Newegg Inc. plans to raise $175 million through a public offering some time in the near future.
