May 26, 2011, 1:12 PM

Web advertising firm Reply buys MerchantCircle in a $60 million deal

MerchantCircle helps 1.6 million businesses increase their online visibility.

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Reply Inc., a marketplace focused on local web advertising, said today it is buying MerchantCircle, which operates an online network that helps local business owners increase their web visibility. Reply said it will pay $60 million in cash and stock for MerchantCircle. Reply expects to complete the transaction in the third quarter.

Reply CEO Payam Zamani will lead the combined company, which will include two segments: The Reply Marketplace, which offers cost-per-lead and cost-per-click advertising services for companies interested in acquiring locally targeted and category-specific consumers; and Reply Media, which includes such properties as, which matches consumers with home-improvement professionals, and, a car search service.

Ben T. Smith IV, MerchantCircle’s founder and CEO, will become president of Reply Media and report to Zamani.

“There is a multi-billion-dollar market opportunity in providing a practical and scalable online marketing solution for powering locally targeted commercial transactions," Zamani says. "Reply’s Marketplace, combined with MerchantCircle's network of local merchants and millions of local consumers, position the company to revolutionize locally targeted online marketing and solve a major problem for locally targeted businesses, who are frustrated by the complexity and lack of effectiveness of search engine marketing and display advertising."  

Founded in 2005, MerchantCircle serves 1.6 million merchants, Reply says.

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