Local advertising tied to worldwide results
BY JOHN ECKBERG | ENQUIRER STAFF WRITER
Four years ago Keith Lawrence and his wife, Joan, were awash with credit-card debt and swamped with stress about the fate of their start-up tech company, ZIPMouse LLC.
Keith Lawrence, 32, a College Hill native, wondered whether they hadn't made the biggest mistake of their lives.
Joan, now education director at St. Joseph Orphanage, had quit her job as a special-education teacher in Indian Hill to work on the newborn company, an approach to search-engine technology that married local advertising with global search results.
Keith had quit his job at a facilities management company he created with his brother in Milford to devote himself to the topic-driven approach of creating Web searches with ZIPMouse.com.
"There were times we had no money. And I mean no money. In 2003 it was as bad as it could get," Lawrence said. "My wife and I would go for a run and we couldn't even get to the track without bawling.
"I had no money. I had no real job. Eventually, it took a million bucks to take this to market. We had to find 20 investors, create a brand, build intellectual property, nail down patents. It took so much effort and expertise."
Now well into its first year of business, the locally developed ZIPMouse.com search engine is delivering revenue to its founders and backers, information to its users and customers to the hundreds of companies that advertise on the site: from the Denver Zoo to Dallas' Melrose Hotel, from SallieMae in Reston, Va., to the Hyatt Regency in Kansas City, Mo.
The company, which launched in April, projects $1 million in revenue at the end of 2005 and $2 million in revenue at the end of the company's fiscal year in April.
Advertising pegged to search has become a sweet spot marketing tool for large and small companies alike.
"The big reason for the growth is that search marketing catches people at a key point - they are already in the search process and are nearing a decision to buy," said Shar VanBoskirk, interactive marketing analyst for Forrester Research, based in Cambridge, Mass.,
"Search marketing can be complicated: Ads that are animated, display ads, banner ads, classified. Sometimes it's very confusing to figure out how to make the best use of your money. The value of a ZIPMouse is that it has developed a way to create local opportunities for companies. Local search is something that neither Google nor Yahoo! has been able to firm up."
The company's success actually hinges on how it differs from blockbuster Web businesses Google and Yahoo! Instead of a typical Web search, which can deliver millions of results, ZIPMouse brings users information by categories or "shelves", which can then be researched into even deeper categories or "taxonomies" of information.
"We are the first true search-engine alternative to Google and Yahoo," Lawrence said. "Most search engines bring too much. It's like having a fly in your house and calling in the National Guard, which then blows up your kitchen."
Instead ZIPMouse organizes results into a series of drop-down screens. Premier advertisers are posted in the center of the results screen while second-tier advertisers are listed in one of two columns under a yellow highlight.
That refreshing organizational approach is what brought lawyer Eric Geppert, partner at Baker & Hostetler LLP, to the project in May 2002.
"I always saw it as a nice alternative to what's out there," Geppert said.
The firm added instant credibility to the venture, Lawrence said, and helped land the first angel investor, a $200,000 commitment in May 2002, Lawrence said.
"The firm was even more integral in assisting with my second group of investors for $50,000," Lawrence said. "Once $250,000 was raised, ZIPMouse began building its technology/business foundation."
CATEGORY, NOT KEYWORD
The road to revenues has not been without a few speed bumps.
It took the support of Eclectic Studios, a media design and consulting firm that employs three partners in offices at Longworth Hall and was founded in 1996, to create what the cyber world now knows as ZIPMouse.
Lawrence went to Eclectic in late 2001 for technical support with his last $5,000 in savings in his pocket and his notion that Web searches should be by category - not by keyword.
Eclectic jumped on board immediately, redesigned the approach and is now an equity owner in ZIPMouse.
"The reason we decided to take on the project was because of Keith," Eclectic partner Curt Staubach said. "We were small and really couldn't take on a start-up company as a client because there was no money there.
"We quickly figured out the potential for ZIPMouse."
The search/advertising model is already working for ZIPMouse:
Four months into its operations, ZIPMouse boasts about 5,000 company listings, with 12 percent to 15 percent of those firms paying $300 to $450 a month.
By April, the company plans to grow to 15,000 Web sites listed on their site. "We had a large waiting list, that's hundreds of Web sites/advertisers, before ZIPmouse.com ever launched," Lawrence said.
A ZIPMouse race car competes at tracks in Lawrenceburg or Florence, exposing the company to 3,000 to 5,000 people each week. It will run on a national circuit next year.
Lawrence says Microsoft came to Cincinnati to meet with him about the technology, and Yahoo!, Ask Jeeves.com and Amazon.com have contacted him for more information.
Companies that want to organize corporate Web sites so results are more transparent for staff and customers could use the ZIPMouse approach.
Some early investors were drawn to ZIPMouse for yet another reason: It would make a good takeover target. That includes Dick Lajoie, 58, an early investor and former CFO of engineering firm Belcan Corp.
"Somebody might look at ZIPMouse some day and say, 'It's a gem, I'll buy it,'" said Lajoie.
E-mail jeckberg@enquirer.com