Can Marchex Pull it Off?

Local search evangelist pushes forward with Adhere. Is it enough?

Marchex (NASDAQ: MCHX), the firm that helped make domain portfolio sales popular with its purchase of Yun Ye’s portfolio, is moving forward with its local ad plans by integrating two platforms. The firm disclosed today that it is combining its Industry Brains and Enhance pay-per-click services into a fresh platform called Adhere. The goal is to bring local online advertising to the masses in a simple manner.

It makes sense, but will Marchex be able to pull it off? The domain industry ought to be hopeful, as Marchex represents one of the true challengers to Yahoo (YHOO) and Google’s (GOOG) duopoly on domain name advertising feeds.

Following bottoming out at $7.51 on February 14, shares of Marchex have been on a tear, closing as high as $13.66 the prior week. This comes during a period of turmoil for many other firms in the domain name industry. Part of the firm’s secret is that it has its own ad network and isn’t solely at the mercy of Yahoo to deliver ads.

The firm has had execution problems in the past, and many investors have called on it to go with a simple and more profitable domain parking strategy (ala Frank Schilling). But with parking in jeopardy, perhaps Marchex’s heavy infrastructure investment strategy will pay off.