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IAC’s CityGrid, Parent Of CitySearch And Urbanspoon, Lays Off Two-Thirds Of Staff, As Local Ad Push Bites

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TechCrunch has learned that CityGrid Media, the parent of local ad-based listings portals CitySearch, Urbanspoon and Insider Pages, is laying off two-thirds of its staff, or around 130 people. IAC, which owns CityGrid, confirmed the number to us and described the process as “streamlining.” The layoffs are taking place amidst another big shift at CityGrid: Andrew Moers, president of another IAC subsidiary, Ask Partner Network, is taking over as CEO. This is, however, only a temporary move: Ron LaPierre, who has been acting CEO since April, is taking a leave of absence for family matters and is expected to return in August.

“We can confirm that there has been a reduction in staff at CityGrid Media. The layoffs will increase operating efficiency, reduce costs and have a meaningful impact on the company’s future profitability,” a spokesperson said. “By streamlining operations, we expect to grow the CityGrid Network and increase returns for both publishers and advertisers.”

The news comes about eight months after another round of layoffs at CityGrid: in October 2012, around 15% of staff were let go. The CEO at the time, Jason Finger, said that the move was related to a shift from cost-per-click (CPC) advertising in the local space to a subscription-based and cost-per-acquisition (CPA) model. (CityGrid, which is made up of some of the oldest companies in this space, based its revenue model around CPC.)

Finger, who had been the co-founder of online delivery company Seamless and joined as head of CityGrid in March 2012 — actually quietly left IAC just over a year later in April 2013, according to his LinkedIn profile. Among his current activities, Finger is now an adjunct professor at NYU, an advisor to American Express’s OPEN small business e-commerce program, and a managing member at Oxygen Capital Partners.

It’s not clear that the CPC/CPA shift, as Finger described it, is what is behind IAC’s latest round of layoffs, but it seems that in any case CityGrid is going to continue to operate as normal and with the same strategy of targeting local businesses for advertising and marketing — just with a much smaller staff and smaller cost base.

While Citysearch, founded in 1995, was one of the earliest movers in the area of online local listings, it’s faced a lot of competition from a lot of other sites focused on local information, and the concept of monetizing that data. Ditto the other sites in the CityGrid portfolio.

Some, like Yelp like Foursquare, have put a huge amount of effort into specifically taking that experience mobile, in an effort to tap into the growing number of users who want listings on the go. Others, like Square and Groupon, are looking to double up basic listings information with other services for local businesses, like payments and inventory management.

Even so, there are question marks over whether the leaders in this area are even able to make decent returns from any of this business yet. And that’s not counting the many others that are approaching the concept of local from other directions, like Nextdoor with its neighborhood-focused social networks; or Patch, owned by TechCrunch’s parent AOL, which has forever been trying to turn profitable.

In that context, CityGrid struggling with its own attempt to make money out of the local space makes a bit more sense — and also underscores the urgency of IAC needing to figure out what its unique selling point will be going forward.

Photo: flickr