And the network-business of Local Corp is more profitable and more sustainable than the business of Yelp, that is very easy to imitate, because it doesn't base on any patent.
About the network of Local Corp: Our network generates about 50% gross margin and it’s our most profitable business. So growing network revenues is the core objective this year. We have too many network products the hosted business directory solution and a XML feed product. We achieve growth by adding more partner sites, by growing monetization of those sites and by adding new products to each site. So how is our network doing?
Source: Transcript of last Earning Call on Seeking Alpha Less
Network revenues net of tax are up 67% year-over-year. We’ve increased the number sites by 8% sequentially, we’re optimizing sites continually and we launched the product in the last quarter to the hosted shopping directory.
Our shopping directory solution allows us to syndicate local product information to our publishing network and is intended to generate revenue through valuable high margin organic traffic. We’ve been testing our shopping directory in a limited number of sites and are encouraged by a steady increase in traffic per site. We believe that as this solution scale that will contribute to our 2014 bottom line.
The growth of Yelp is from 55.0 million revenues in Q2/2013 to only 58 - 59 million revenues in Q3/2013 (guidance) with only 6.9% for a company with such a high valuation between bad and miserable. The growth of Local Corp from Q2/2013 to Q3/2013 will be higher.