ShopLocal sees one stop for ad circulars

By Sandra Jones

Oct. 31, 2005

With newspaper circulation declining, rifling through the Sunday circular ads is a dwindling pastime.

So it was no surprise that the nation's three big newspaper chains - Chicago's Tribune Co., Knight-Ridder Inc. of San Jose, Calif., and Gannett Co. of Virginia - teamed up last year to acquire ShopLocal LLC, an online Sunday circular company occupying former Andersen offices in the Loop.

Now, ShopLocal is gearing up to become to local newspaper advertising what CareerBuilder LLC is to classified ads: a national clearinghouse for local information. Just as CareerBuilder, owned jointly by the same three chains, allows job seekers to look for work in local markets, ShopLocal lets consumers find deals at area stores.

Brian Hand, a former IBM engineer, started ShopLocal's predecessor, ShoppingHound, in his basement six years ago. The initial idea was to give local merchants a place to advertise promotions online.

Within two years, Mr. Hand branched into operating online circulars for retailers' own Web sites and landed his first customer: Sears, Roebuck and Co.

Today, ShopLocal operates online catalogs for chains including Target Corp., Best Buy Co. and Home Depot Inc., accessible through those retailers' Web sites. ShopLocal also puts circulars on its own site, www.shoplocal.com.

Mr. Hand's next move: Get more local. He plans to tap the salesforces at the newspaper-chain owners, who have built relationships with local merchants. "Our aim is to add tens of thousands of additional retailers in the next year," says Mr. Hand.

That would help ShopLocal compete with its chief rival, Cairo Inc., a San Francisco company that surfs the Web for sales promotions and delivers them to shoppers.

"Faced with threats from the Internet to their advertising franchises, newspapers are seeking to hang onto what they've got and expand on the Internet," says media consultant John Morton of Morton Research Inc. in Silver Spring, Md.

©2005 by Crain Communications Inc.