NEW YORK ( TheStreet) -- Shares of Local.com (LOCM - Get Report) flew higher on Friday after the Irvine, Calif.-based company disclosed a new two-year deal with search giant Google (GOOG - Get Report).
The company, which has an online directory with information on more than 14 million businesses, said in a Form 8-K filing with the
Securities and Exchange Commission that it's agreed to provide advertising and search services on certain sites for Google from Aug. 1, 2011 through July 13, 2013.
The stock finished up 12.5% at $3.79 on volume of 7.6 million, nearly 10 times the issue's trailing daily average of around 780,000. Year-to-date, the shares are down more than 40%, although Friday's move provided a healthy bounce of a 52-week low of $3.17 on May 26.
Local.com is set to report its fiscal second-quarter results on July 25 with the average analyst estimate calling for a loss of 12 cents a share on revenue of $17.1 million in the June-ended period.The company had been consistently profitable for nearly two years until its revenue from Yahoo (YHOO - Get Report) took a hit after Microsoft's (MSFT - Get Report) Bing search engine began charging advertisers less for search traffic. In its fiscal first quarter ended in March, Local.com broke even on an adjusted basis with revenue coming in at $16.8 million, down 10% year-over-year, as both its network and search and advertiser services businesses saw sharp declines. At that time, the company forecast an adjusted loss of $2.5 million, or 12 cents a share, for the June quarter on revenue of around $17 million. Local.com attributed the loss expectation to its plans to invest in its Spreebird business, a deals site that competes with Groupon and others, and its acquisitions of rich media advertising technology companies Rovion and Krillion. In a side note, BlackRock (BLK - Get Report) disclosed on Friday that it's reduced its stake in the company to 2.9% from a prior 5.4%. -- Written by Michael Baron in New York.
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