There are a LOT of hyper-local marketing companies in business right now. Everyone knows Groupon and LivingSocial, of course. And Facebook and Google also have local offer businesses.
But there are also tons of smaller ones, and sub-units tucked into larger businesses — like AOL’s Patch and MSNBC’s EveryBlock.
Some of the businesses are publishers of local information (Patch, and YP, for instance). And others are hyper-local marketing businesses like Groupon or The Weather Channel. Google, of course is both. They all have one thing in common: They’re in the business of helping local businesses advertise themselves to local customers.
We decided to try and display them all in a chart based on size, and whether they are likely to acquire, or be acquired, by other companies. (With all due respect to LUMA Partners, let’s call this an InsiderScape.)
The result suggests that the business has organised itself into two types of companies: a small set of large, acquisitive players; and a large set of small, non-acquisitive players. (There are very few large players that don’t have acquisition histories, and very few small players that are scaling up via leveraged acquisitions.)
Crucially, this huge number of companies are all doing essentially the same thing — digitally connecting local businesses with their consumers. That suggests this is a commodity environment in which companies are likely to experience severe downward pressure on their ability command prices from merchants. And that means consolidation, through M&A, is likely.
Check it out, and let us know if we got anything wrong:
[credit provider=”Jim Edwards / BI”]