Marchex Boosts Its Leadership Position in Call Advertising Market Through Acquisition of Mobile Voice Search Leader

Marchex, Inc. today 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 research 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 clients 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%.

The addition of Jingle Networks

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 clients 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 clients via the phone by design 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, during 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."

The unparalleled assets of each company

"Given the unparalleled assets of each company, we believe there are many opportunities to provide furthermore value to our clients 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, nevertheless, can be costly for mobile carriers and network operators given the innovation and other items necessary to operate the service. Through speech-to-text transcription and automation technologies, Jingle Networks' reduces these costs during 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:

Call advertising helps businesses acquire and up-sell new clients through phone calls, by reaching clients when they are ready to buy. Marchex provides in a class by itself 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 just as VoIP (Voice over Internet Protocol) -- creates significant new growth opportunities in the digital advertising market," said Pete Christothoulou, COO at Marchex. "During 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 clients is the call."

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.

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.

Marchex intends to update its 2011 business outlook upon the release of its first quarter revenues results in May 2011.

The addition of Jingle

With the addition of Jingle, Marchex believes call-driven earnings will represent more than 75% of earnings 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."

Marchex's mission is to unlock local commerce globally by helping advertisers reach clients 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 clients through phone calls. Our award-winning Small Business Marketing products empower businesses to efficiently monitor their online presence, communicate with their clients, and acquire new ones. Every day, our products support hundreds of thousands of advertisers and partners, ranging from global enterprises to local businesses.

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future earnings, other financial guidance, acquisitions, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not in fact achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of April 11, 2011 and Marchex undertakes no duty to update the information provided herein.

OIBA represents income from operations plus stock-based compensation expense and amortization of intangible assets from acquisitions. This measure, among other things, is one of the primary metrics by which Marchex evaluates the performance of its business. Additionally, Marchex's management uses Adjusted OIBA, which excludes any gain/loss on sales and disposals of intangible assets as for each asset, these are viewed as non-recurring in nature. Adjusted OIBA is the basis on which Marchex's internal budgets are based and by which Marchex's management is currently evaluated. Marchex believes these measures are useful to investors because they represent Marchex's consolidated operating results, taking into account depreciation and other intangible amortization, which Marchex believes is an ongoing cost of doing business, nevertheless excluding the effects of certain other expenses or gain/loss just as stock-based compensation, amortization of intangible assets from acquisitions and gain/loss on sales and disposals of intangible assets. Adjusted EBITDA represents income earlier interest, income taxes, depreciation, amortization, stock compensation expense, and gain/loss on sales and disposals of intangible assets. Marchex believes that Adjusted EBITDA is another alternative measure of liquidity to GAAP net cash provided by operating activities that provides meaningful supplemental information regarding liquidity and is used by Marchex's management to measure its ability to fund operations and its financing obligations.

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