SEATTLE – Marchex, Inc. (NASDAQ: MCHX) announced the acquisition of Jingle Networks, adding an important and growing source of mobile distribution to its call advertising network. Marchex will pay up to $62.5 million in cash and stock for Jingle Networks, which is one of the leading providers of mobile voice search performance advertising and technology solutions in North America.

Jingle Networks’ core business is providing performance advertising solutions to mobile carriers and mobile network operators so that advertising agencies and businesses can leverage in-call advertising, including pay-for-call, to gain new customers over the phone or through the use of mobile applications. Over the last twelve months, Jingle Networks has added numerous mobile distribution partners and grown its mobile partner call volume by more than 200%.

With the addition of Jingle Networks, the Marchex Call Advertising Network will now have an annualized reach of more than 500 million phone calls across digital media, including mobile. This new call advertising network empowers both large and small businesses to reach customers when they are ready to buy. As the digital advertising market shifts to incorporate phone calls in a more significant way, the Marchex Call Advertising Network is best positioned to provide solutions to advertising agencies and businesses due to its open platform approach using all digital media platforms and supporting all partner types.

“Our product vision is to build the most effective and broadest-reaching call advertising network that connects millions of businesses to hundreds of millions of customers via the phone at the right time in the purchasing process,” said Russell C. Horowitz, CEO and Chairman of the Board at Marchex. “Jingle Networks accelerates our call advertising strategy by adding a key asset in mobile voice search, while also increasing the scale of our call advertising network through their relationships with many of the largest U.S. mobile carriers and leading mobile network providers.”

“Given the unique assets of each company, we believe there are many opportunities to provide further value to our customers and partners with the strengthened call advertising network from Marchex,” said John Roswech, President of Jingle Networks. “We share Marchex’s vision and believe they have the strategy, assets and resources to deliver the most comprehensive call advertising solutions. We are excited to be part of the team.”

Driven by the rapid adoption of mobile and smart phones, mobile carriers and network operators are seeing a significant rise in the number of consumers leveraging voice search to find businesses. Voice search, however, can be costly for mobile carriers and network operators given the technology and other items necessary to operate the service. Through speech-to-text transcription and automation technologies, Jingle Networks’ reduces these costs while also increasing revenue through an ad-supported business model, including pay-for-call.

With the addition of Jingle Networks to its call advertising network, Marchex’s position in the market is as follows:

- Advertisers gain access to digital media across Marchex’s Call Advertising Network from exclusive and preferred relationships with more than one hundred channel sources including: four of the top five U.S. mobile carriers, the leading global VOIP provider (Skype), mobile network operators, and mobile application and directory providers.
- Advertiser breadth continues to grow significantly, spanning national and local advertisers across North America utilizing the Marchex Call Advertising Network to drive qualified calls to their business.
- Call analytics to track and measure the success of call advertising campaigns.
- Call advertising helps businesses acquire and up-sell new customers through phone calls, by reaching customers when they are ready to buy. Marchex provides unique phone numbers and analytics tools that are used by advertisers to place, measure and optimize campaigns across all digital media channels, which helps these businesses increase their sales. Call advertising and analytics technologies are more important than ever to track and measure the success of call advertising campaigns in order to help advertisers better optimize their call advertising strategies to increase impact, maximize spend and deliver better sales results for their business.

“We believe the evolution of the mobile market — the growth of smart phones and other consumer communication technologies such as VOIP — creates significant new growth opportunities in the digital advertising market,” said Pete Christothoulou, COO at Marchex. “While the ‘click’ was the monetization event in the desktop world, we believe that in today’s mobile world the monetization event best suited to connecting advertisers to customers is the call.”

Transaction Details and Financial Considerations:

Consideration:
Under the terms of the agreement, Marchex will pay up to $62.5 million in cash and Marchex common stock plus transaction costs. The consideration is comprised of:

(a) $16.7 million in cash, net of cash acquired, and $8 million of stock (valued based on 15-day trailing average) at closing, and

(b) on each of the 12 and 18 month anniversaries of the closing, Marchex will make payments of between $18 and $18.9 million in cash and/or stock at Marchex’s option.

In addition, following the closing, Marchex anticipates it will issue up to $3.5 million of restricted stock to certain employees of Jingle Networks subject to vesting for up to four years.

Jingle Networks Financial Summary:
Marchex believes Jingle Networks will generate more than $26 million in 2011 revenue, up more than 40% over 2010. For 2011, Marchex estimates $4 million in intercompany eliminations, which would result in more than $22 million in net revenue.

For the remainder of 2011, Marchex expects Jingle Networks to contribute:

- more than $16.2 million to its revenue, net of intercompany eliminations;
- more than $1.2 million in adjusted operating income before amortization;
- this implies more than $1.7 million in adjusted EBITDA based on estimated add-backs of approximately $0.5 million in additional depreciation and amortization to adjusted operating income before amortization.

Marchex Financial Guidance:
Marchex intends to update its 2011 business outlook upon the release of its first quarter earnings results in May 2011.

Call-Driven Revenue:
With the addition of Jingle, Marchex believes call-driven revenues will represent more than 75% of revenues on an annualized basis by the end of 2011.

Christothoulou adds, “Given their performance, we believe that calls represent one of the primary growth opportunities in digital advertising. The reason is that calls are at the end of the advertising and sales funnel, events that are closest to the transaction and most likely will translate into sales.”

About Marchex:

Marchex’s mission is to unlock local commerce globally by helping advertisers reach customers through the phone when they are ready to buy.

Our performance-based call advertising products, the Marchex Call Advertising Network and Marchex Call Analytics, are reinventing how businesses acquire and upsell new customers through phone calls. Our award-winning Small Business Marketing products empower businesses to efficiently monitor their online presence, communicate with their customers, and acquire new ones. Every day, our products support hundreds of thousands of advertisers and partners, ranging from global enterprises to local businesses.

Marchex extends its call advertising leadership and highlights multi-billion dollar market opportunity

SEATTLE – Marchex, Inc. (NASDAQ:MCHX), a call advertising and small business marketing company, announced the Marchex Pay-For-Call Exchange, a performance-based call advertising product that connects advertisers to customers through phone calls driven from online, mobile and offline marketing channels. Initially introduced to select customers in 2009, Marchex has seen significant early adoption of this product.

“Pay-For-Call advertising is the natural next step in the evolution of performance media. It is the last mile for advertisers, literally connecting them to their prospective customers through the phone. Each iteration of advertising products and business models – from pay-per-view, to pay-per-click, to pay-per-conversation – brings advertisers closer to customers and the actual transaction while increasing efficiency and ROI,” said Pete Christothoulou, Chief Operating Officer at Marchex.

The Pay-For-Call Market:

According to BIA/Kelsey, advertisers spend more than $35 billion per year driving phone calls. These dollars are spent on multi-channel marketing products across Yellow Pages, radio, television, print and other media forms.

While performance-based call advertising is in its early stages of adoption, Marchex predicts that the market will grow rapidly over the next several years due to several factors:

a. Explosion of Digital Supply. While the number of opportunities to place digital media dollars to drive calls is relatively small today, it will increase markedly over the next several years. Acceleration of mobile advertising, the transition of directory assistance to ad supported, the entrance of ad-supported models by PC-based phone call providers and the efforts of directories to better monetize their listings will usher these changes into the industry rapidly.

b. Technology Evolution. Technologies have emerged and will continue to develop that cost-effectively serve, track, optimize and filter phone calls, while providing more customer intelligence than other mediums, such as caller geography, demographic data and information extracted from call recordings.

c. Performance Models Drive Results. As more digital media opportunities and technologies emerge, performance-based models are following. Performance-based business models, such as paying only for qualified phone calls, are materializing and driving high advertiser return on investment (“ROI”), while reducing monetary risks. According to Marchex internal data, over the last nine months, many advertisers using its Pay-For-Call Exchange have experienced higher ROI than leading pay-per-click programs, with conversion rates for certain customers as high as 50 percent.

Marchex Pay-For-Call Exchange Overview:

The Marchex Pay-For-Call Exchange combines a robust telephony platform with campaign creation expertise and call filtering technologies to create, manage and optimize advertiser campaigns across more than 50 publisher partners in online, offline and mobile media. Additionally, advertisers have access to rich call analytics and customer intelligence, including caller geography and call recordings.

Advertisers that have joined Marchex’s Pay-For-Call Exchange have experienced significant ROI, including an average call conversion ranging from 20 percent to 30 percent for many advertisers, with some seeing as high as 50 percent; typical consumer engagement on the phone averages more than eight minutes, with certain categories and advertisers experiencing up to 12 minutes; and typical advertiser budget increases have averaged 200 percent of their initial commitment. Additionally, companies that have joined Marchex’s Pay-For-Call Exchange have been able to monetize their inventory more effectively.

While still in its relative infancy, Marchex has built a significant, growing customer and partner base for its Pay-For-Call Exchange, including leading digital agencies such as Razorfish, one of the largest interactive marketing and technology companies in the world; ADT, the world’s largest electronic security company; PRIMEDIA, a provider of online, print and mobile platforms that provide real estate rental listings; and Jingle Networks, the nation’s leading advertiser-supported directory assistance service at 1-800-FREE-411.

Customer and Partner Feedback:

“The Marchex Pay-For-Call Exchange is one of the fastest growing marketing programs for us, and it’s been a great complement and expansion to our digital programs,” said Danny Huynh, Director of Search Marketing, Razorfish. “It’s quickly becoming a mandatory marketing program for our direct response clients, and one where we see opportunities to grow our participation significantly.”

“We are very focused on identifying and executing against the most effective and efficient marketing programs available,” said Frank Rivera, Director of Digital Marketing, ADT. “As consumers are exposed to more communication channels and touch points, we have to diversify our tactical efforts for conversions beyond the click through innovation such as the Marchex Pay-For-Call Exchange. We are seeing efficiency in helping us leverage marketing across online, offline and mobile.”

“In these early stages, the Marchex Pay-For-Call Exchange has been a successful marketing program for us, helping us drive more leads to our apartment advertisers,” said Tracy Dodd, Director, Interactive Marketing, Consumer Source Inc., a PRIMEDIA company. “I’ve been impressed not only by Marchex’s ability to generate incremental customers at scale very quickly, but also with their level of service and expertise in this medium.”

“Marchex has quickly become one of our largest customers and is definitely the fastest growing,” said John Roswech, President of Jingle Networks / 1-800-Free-411, a Marchex Pay-For-Call Exchange publisher. “Their unique collection of call-focused assets and resulting ability to drive advertiser results is proving to be a competitive advantage.”

About Marchex:

Marchex’s mission is to unlock local commerce everywhere by helping advertisers reach customers wherever they may be – in mobile, offline and online channels, including on our own local and category Web sites.

Our performance-based call advertising products, Marchex Pay-For-Call and Marchex Call Analytics, are reinventing how businesses acquire new customers through the phone. Our award-winning Small Business Marketing products empower local businesses to efficiently monitor their online presence, communicate with their customers, and acquire new ones. Every day, our products support tens of thousands of advertisers and partners, ranging global enterprises to local businesses.

For more information about Marchex, please visit www.marchex.com.

BEDFORD, Mass. – Jingle Networks, Inc., the leader in free advertiser-supported directory assistance and operator of 1-800-FREE411, has launched “JingleConnect,” an in-call advertising network service to connect advertisers with millions of ready-to-buy consumers. Using its own ad-serving technology, Jingle Networks will help advertisers and companies with high call volume earn revenue by selling in-call ad time – a proven way to reach consumers via a one-to-one calling environment.

JingleConnect allows any company with high call volume to easily and seamlessly insert audio advertisements in their calls, by taking advantage of Jingle’s existing base of more than 130,000 advertisers on 1-800-FREE411. Jingle’s technology can distribute audio advertising to other companies that operate call centers, information lines, or any calling environment where their consumers are on hold.

JingleConnect is already serving millions of advertisements each month for more than a dozen publishers. These include companies such as SayNow, which enables fans to send phone and text messages to celebrities and Slydial, which lets you slip a message directly into voicemail. Other publishers include Snoozester, Inc. and RH Brands, operators of The Rejection Hotline.

“JingleConnect is a logical evolution for us, as we’ve already created a profitable ad-supported directory assistance service that has served more than 900 million ads to date,” said John Roswech, president of Jingle Networks. “JingleConnect has the ability to attract advertisers that are looking for new and effective ways to talk to a large audience of consumers – and to help companies easily monetize in-call time.”

In-call advertising is becoming an increasingly important media channel for advertisers who are looking for new ways to reach a fast growing mobile population. Given that wait times for customer service lines now average up to 15 minutes or more per call, converting dead air into a revenue stream while capturing a captive audience on hold has become an attractive revenue opportunity for companies of all types and sizes.

Since launching 1-800-FREE411 in 2005, Jingle has assembled one of the largest telephonic audio ad networks in the world, with more than 130,000 advertisers. Partners such as Idearc and Citysearch.com, marquee brands like McDonald’s, Wal-Mart, Ford and Radio Shack, and small independent retailers use Jingle’s interactive audio campaigns to engage target audiences.

“A successful in-call ad network requires an ad inventory that will attract companies looking to build a revenue stream from their customer hold time, and having the technology to deliver the ads,” said Matt Booth, senior vice president and program director, Interactive Local Media for The Kelsey Group. “With its track record in bringing in-call advertising to its own customers in the free directory assistance business, Jingle Networks is well positioned to deliver JingleConnect to other markets.”

For more information, or to join the JingleConnect, contact bizdev@free411.com or go to www.jingleconnect.net.

About Jingle Networks

Jingle Networks is transforming the way advertisers view the telephone. Jingle runs the nation’s leading ad-supported directory assistance service 1-800-FREE411 (www.free411.com), providing consumers an anytime, anywhere source of free information by phone. 1-800-FREE411 offers advertisers highly targeted and timely promotional opportunities to reach a large but targeted customer base who are ready-to-buy, garnering a response rate twice that of other direct response media. The company also operates JingleConnect, an in-call advertising network that allows any company with high call volume to easily and seamlessly insert audio advertisements in their calls, by leveraging of Jingle’s base of over 130,000 advertisers. For more information on Jingle Networks and 1-800-FREE411 go to www.free411.com and for information on JingleConnect go to www.jingleconnect.net.