• by Tameka Kee , October 10, 2007

Local search is picking up plenty of venture capital investment on both coasts.

Woodland Hills-based ReachLocal says it secured more than $55 million in funding from venture capital firms including Rho Ventures and Galleon Crossover Fund. Focusing on bridging the gap between local businesses' online and offline efforts, it will use the funds for expansion.

Meanwhile, Brooklyn-based local social network and news aggregator Outside.in closed a round of financing totaling $1.5 million from investors including Union Square Ventures and Milestone Ventures.

ReachLocal simplifies the search marketing process for local businesses, helping them create, maintain, track and analyze their campaigns with a proprietary automated platform.

Through partnerships with Google, Yahoo, and a number of Internet Yellow Pages providers, the company garners traffic and leads for these advertisers--eliminating the need for them to manage multiple search and Web analytics accounts.

In the last year, ReachLocal has increased its sales team by several hundred employees and opened 11 sales offices, including Los Angeles and Atlanta--to better serve clients like FTD and TravelCLICK.

The company plans to use the funding to continue its national expansion--and ultimately end up with a global presence within the next four quarters. ReachLocal has garnered nearly $70 million in funding since the company's founding four years ago.

According to Zorik Gordon, ReachLocal's CEO, the company's services for smaller "Fortune 10 Million" companies is analogous to what aQuantive and ValueClick do for Fortune 500 companies. "Our scalable technology and proprietary sales force have leveled the playing field for local companies who need strong advertising results using a modest budget. Bottom line, we do all the heavy lifting so they can concentrate on running their business."

Meanwhile, Outside.in will use its funding to build out features on the site, expand its outreach to offline partners like local newspapers, and launch a geo-targeted advertising platform. The service collects neighborhood-specific info from blogs, traditional media and crowd-sourced insight to provide members with a comprehensive look at their real-life community. Outside.in covers 55 cities and more than 3,000 neighborhoods in the U.S.

"The development of our partner program and targeted regional and national advertising will be two major initiatives for the coming year," said Outside.in co-founder Steven Berlin Johnson. "We've spent our first year building out a state-of-the-art platform for organizing the Web geographically, and now we've got a fantastic opportunity to build a business on top of that platform."

While ReachLocal's financing is massive compared to Outside.in's, both announcements are a nod to the viability (and continued investor confidence) of the booming local lead generation and community information space, since more local businesses are using said services to target consumers.