Local.com shares leap on Google deal

Local.com shares leap on Google deal

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BANGALORE (Global Markets) - Shares of Local.com Corp (LOCM.O) surged 24 percent to a 10-week high on Friday, a day after the U.S. search provider signed an agreement with Google Inc (GOOG.O) for advertising and search services.

Loss-making Local.com, which throws up search results for local businesses, products and services, was under pressure after its largest client Yahoo Inc (YHOO.O) moved to Microsoft Corp's (MSFT.O) Bing search engine in January.

Yahoo contributed about 37 percent to Local.com's first-quarter revenue, down from 49 percent last year. Google currently contributes less than 10 percent to its revenue.

"The shares are moving because Local.com made a prudent move by switching to Google from Yahoo and the deal is expected to significantly improve its revenue per click (RPC)," David Kestenbaum, analyst at Morgan Joseph TriArtisan, said.

Bing was charging advertisers less for Local.com's search traffic, which resulted in less RPC than what Yahoo had paid prior to the integration of its search engine with Microsoft, Local.com had earlier said.

Local.com's agreement with Google starts from August 1 and ends on July 31, 2013.

Shares of Irvine, California-based Local.com were up 19 percent at $4.00 in midday trading on Nasdaq after climbing as high as $4.18.

(Reporting by Rachana Khanzode in Bangalore; Editing by Maju Samuel)