$YXTAs the news of Yext’s S-1 filing in advance of its IPO makes it way throughout the Search industry, I can’t help but think that it will be a seminal event in the annals of Local Search. I’ll leave it to others to pore through the S-1 and pick it apart, and it appears there is plenty to pick at, at least amongst my skeptical followers:

Every IPO, except for perhaps Google, is going to have its detractors, and while the market will absolutely hold Yext’s feet to the fire to perform, I am most interested in what the impact of the IPO will be to the rest of us Localistas.

First, let’s look at the what a successful Yext IPO could mean to the listings management space and “Local” in general.

On the one hand you can say Yext has been eating everyone’s lunch. It is far and away the biggest gorilla in the space and has aggressively used its VC $ to buy market share through both marketing and technological innovation. So surely raising another $100 million or two to continue on that path is going to mean even less lunch for everyone else. But the fact is that the Local space is so enormous that there is more than enough chow to go around for everyone. This is the bull case for Yext, and while it has a big lead, it can’t possibly gobble up the world or even a small percentage of the hundreds of millions of global business locations any time soon. And in fact, companies like Brandify, Location3, SweetIQ and yes, even Moz, should be rooting for Yext’s IPO to be a smashing success as it would validate their business models, increase the appetite for more investment, and (I can hear those hands rubbing and lips smacking) create currency for consolidation (Can’t see it happening, but the industry would flip our collective wigs if Yext acquired Moz).

But what if the offering tanks?

Despite its size and the number of start-ups focused on it, Local has been almost a non-entity when it comes to big technology success stories. It’s perhaps an over-simplification (you could argue Google, Facebook, Snap, GoDaddy, etc. have strong Local components), but I can think of only a few Local-specific Internet IPOs of note over the past decade – Yelp, ReachLocal, AngiesList, Local.com, etc. (and let’s not forget Mapquest in 1999!). None of those public offerings have set the world on fire, having laid bare the fact that selling to local businesses requires lots of expensive feet on the mean virtual street. Yext has proven its ability to innovate and now it will have to prove that it can solve this age-old problem.

I have been hearing chatter from various birdies that there are a number of private equity companies looking at Local trying to find a way in. More investment in this challenging space would be a good thing for all players, but if Yext’s IPO does not go well, it’s likely we will see more Local-focused companies fail as skeptical investors choose to continue to keep their powder dry.

For many of us, it doesn’t matter what the outcome of this event is. If Yext goes up like a rocket ship, it validates the space and we win. If Yext implodes, there are 925,000 more locations that will need our help and we win. As Yext is a client of ours, we of course are rooting for them. But as prudent investors who know the stock market can be a chump’s game, we are also buying shares in Orville Redenbacher…


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