Online Ad Company Yodle Raises Funds

Two-year-old Yodle has grown 400 percent year over year, largely because it has identified an underserved online market, said Yodle CEO Court Cunningham.

"We are focused on helping small businesses get noticed online," Cunningham said, "So Yodle buys ads online, designs their Websites, provides email applications and implements SEO best practices."

Half of Yodle's prospects do not even have a Website, he added: "Two-thirds of consumers are searching for local businesses online, but only 3 percent of local businesses are online."

Cunningham, who built DoubleClick's Marketing Automation business from zero to $55 million in revenue over five years, sees this as a burgeoning market with tremendous potential.

"This is like 1999 was for DoubleClick, but now merchants know about the Internet, about what Websites can do for them," he said.

The difference for small businesses is that Yodle focuses on generating phone calls rather than on Web clicks. Yodle's goal is to make buying online ads simple and easy for small businesses and to offer a high-performing, cost-effective alternative to the Yellow Pages. Those phone calls can convert into handsome profits: The company estimates that $1 invested with Yodle results in $8 in additional profit for small businesses such as electricians, lawyers, doctors, roofers and even florists.

The solution provider offers customers a proprietary algorithm that helps automatically select the best keywords to buy in order to optimize placement on search engines such as Google and Yahoo!

Cunningham said Yodle's business is growing by 60 percent a quarter, and has 70 employees. He added that query volume is growing by 50 percent annually, and that consumer's queries are becoming more specific. Currently, Yodle operates offices in New York, Boston, Philadelphia, Atlanta and Washington, D.C., but Cunningham said that as query volume in regional markets increases, so too will Yodel's reach. Yodle's latest financing would go toward planned a expansion to 30 cities by mid-2009, he said.

"We have 800 customers now," Cunningham noted, "but there are 18 million small businesses out there."