ReachLocal Shares Jump on Google Partnership Deal

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ReachLocal Inc. shares soared more than 33 percent on Wednesday after the company announced a search advertising partnership with Google Inc. and raised its financial outlook.

The Woodland Hills online marketing company said it will be a partner in overseas markets for the Google search engine’s AdWords system, which links search results to ads. ReachLocal operates in the United States, Canada, Australia, the United Kingdom and Germany, and helps small to mid-sized businesses reach local customers on the Internet.

“This new partnership builds on a long-standing relationship ReachLocal has had with Google throughout our expansion into 50 local markets over the last seven years,” said Chief Executive Zorik Gordon in a statement. “International markets now represent more than 20 percent of ReachLocal’s business, and accelerating our international growth is a strategic priority for us.”

In part due to the deal, the company now expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $9 million to $11 million, compared with an earlier forecast of $6 million to $8 million.

ReachLocal, which went public last May, reported a first quarter net loss of $3.4 million (-12 cents per share), compared with a loss of $2.3 million (-10 cents) a year earlier. Revenue rose 32 percent to nearly $84.1 million. The Wall Street consensus was for a per-share loss of 10 cents on revenue of more than $84.3 million.

Shares closed up $6.04, or 33.6 percent, to $24.03 on the Nasdaq.

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