Reply! Inc., an online marketing platform that supplies traffic and leads to the real estate and automotive industries, hopes to raise $60 million in an initial public offering after posting its first profit in 2009, the company said today.

Doing business as Reply.com, the San Ramon, Calif.-based company aggregates pay-per-click traffic from search engines and its own display ads and Web sites, in turn providing clients with leads or "enhanced clicks" it creates by requesting more specific information from consumers.

Reply! Inc., an online marketing platform that supplies traffic and leads to the real estate and automotive industries, hopes to raise $60 million in an initial public offering after posting its first profit in 2009, the company said today.

Doing business as Reply.com, the San Ramon, Calif.-based company aggregates pay-per-click traffic from search engines and its own display ads and Web sites, in turn providing clients with leads or "enhanced clicks" it creates by requesting more specific information from consumers.

Advertisers can use the Reply.com platform to create campaigns for buying leads or traffic, receiving geo-targeted traffic from consumers who are at a critical decision-making point, the company says.

Reply.com counts Weichert Lead Network, Intelius, ZipRealty, LeadtoRealty, Market Leader, MultipleListing.com, RealtyStore.com and RealEstate.com among its clients in the real estate industry.

According to a preliminary prospectus filed with regulators for the initial public offering, Reply.com generated $34.3 million in revenue and $2.5 million in profits in 2009, with revenue up 47 percent from 2008.

That compares to net losses of $6.1 million in 2007 and $3.2 million in 2008, the company said.

Reply.com said its enhanced click and lead marketplace generated 95 percent of total revenue, compared with 75 percent in 2007. In the final three months of 2009, Reply.com generated more than 4.9 million enhanced clicks and 700,000 leads, and served 5,000 advertisers, the company said.

Real estate professionals can decide how many leads they wish to receive for a week or a month and the total amount they wish to spend, the company said when launching the marketplace. Leads can be selected for a given ZIP code area, within a radius of a ZIP code, or by city, county or state, and delivered on an exclusive basis or on a non-exclusive basis (see story).

Market Leader buys traffic from Reply.com for HouseValues, JustListed, Growth Leader, Team Leader and RealtyGenerator, which require customized advertising based on geography, number of agents in the region, and depth of online presence, Reply.com said.

Market Leader also auctions consumer traffic that falls outside of its coverage areas to Reply.com, monetizing traffic that would have otherwise been wasted. …CONTINUED

In the prospectus, Reply.com revealed that Connecting Neighbors, a network of local neighborhood Web sites designed to promote local real estate agents acquired by Reply.com in 2005, has become a much smaller part of its business.

Connecting Neighbors generated just 5 percent of the company’s revenue last year, down from 25 percent in 2007, the company said.

In 2008, Reply.com determined that Connecting Neighbors was "no longer core to our business, and although we continue to offer the service, we are no longer focused on developing, promoting or selling the service," the company said.

Since its founding in 2001, Reply.com has raised $27.5 million in financing (see story).

At the end of January, Reply.com had 127 full-time employees, including 103 in sales and marketing, 14 in technology, and 10 in general and administrative and other functions.

The company said it plans to use the money raised in the public offering to expand into new categories, and to expand the number of partnerships it has with ad agencies and media groups.

Reply.com will work with other businesses that address the locally targeted advertising market, and provide the company’s traffic and lead marketplace platform on a "white-label" basis to complement their offline and other online activities.

In the last three months of the year, Reply.com said 67 percent of its traffic came from the purchase of pay-per-click ads from search engines such as Google, Yahoo! and Bing. The company said display ads it purchases across advertising networks, advertising exchanges, social networks, affiliate networks and directly through large consumer portals represents the company’s fastest-growing source of traffic.

Jefferies & Co. Inc. and Piper Jaffray & Co. will act as joint book-running managers for the initial public offering with Needham & Co. LLC and ThinkEquity LLC acting as co-managers, Reply.com said.

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