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REACHLOCAL™ SECURES $55.2 MILLION IN FUNDING

Investment Group Validates the Local Digital Advertising and Marketing Leader's Move to Aggressively Expand its Business

(WOODLAND HILLS, Calif.) - October 9, 2007 - ReachLocal™, Inc. (http://www.reachlocal.com) announced today it has secured $55.2 million in funding to support the aggressive expansion of its local digital advertising and marketing operations. Leading the Series D investment group is New York-based venture capital firm, Rho Ventures. The group also includes New York-based Galleon Crossover Fund and existing ReachLocal investor, Silicon Valley-based VantagePoint Venture Partners. Savvian Advisors, LLC, served as the exclusive financial advisor to ReachLocal for this transaction.

ReachLocal delivers to small businesses a patent-pending local search engine marketing solution that links their online advertising spend to their offline sales activities and, for the first time, provides true advertising ROI transparency. With simplicity and automation, ReachLocal manages the process local businesses need to create, maintain, track and analyze their Internet search advertising campaigns. Through a single platform and one budget, ReachLocal makes available to advertisers 98 percent of the search engine landscape via its partnerships with Google, Yahoo!, MSN, Superpages.com and others.

"What major digital agencies like aQuantive and ValueClick are doing for Fortune 500 companies, ReachLocal is doing for the Fortune 10 Million," said Zorik Gordon, CEO of ReachLocal. "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."

ReachLocal powers the search engine marketing offerings of hundreds of leading marketing agencies, including FTD (http://www.ftd.com) and TravelCLICK (http://www.travelclick.net), while directly managing the online marketing efforts for tens of thousands of local businesses nationwide. During the past 12 months, ReachLocal has opened 11 sales offices in the top markets in the United States, while adding several hundred sales people to its ranks.

"With this validation of our business model, we can now begin to aggressively roll out our proposition both nationally and internationally," said Gordon. "Furthermore, we look to expand our scope of products and services to meet the growing advertising needs of these local companies."

"It is ReachLocal that pioneered the local search engine marketing industry by combining a compelling technology platform with a strong partnership model and a proprietary sales force that delivers the best results to the advertiser," said Habib Kairouz, Managing Partner of Rho Ventures. "They cracked the code at a time when businesses either didn't know how to apply local search advertising, or were bogged down by its complexity. Reachlocal finally brings an affordable and simple online advertising solution to millions of local businesses."

Since its founding in 2004, ReachLocal has raised a total of $67.9 million in equity financing.

About ReachLocal, Inc.
ReachLocal, Inc. (http://www.reachlocal.com) is a leading provider of local online marketing solutions for small- and medium-sized businesses. The Company's mission is to become the digital advertising agency of record for these companies, delivering the same broad set of online marketing functions currently only afforded to large corporations on a national basis. ReachLocal pioneered the local search engine marketing industry by bringing together a patent-pending technology with a strong partnership model and a proprietary national sales force. The result is a simple, scalable and affordable platform local businesses need to create, maintain, track and analyze their Internet search advertising campaigns. ReachLocal makes available to advertisers 98 percent of the search engine landscape through partnerships with Google, Yahoo!, MSN, Superpages.com and others. Founded in 2004, ReachLocal is a privately-held corporation led by Zorik Gordon, its Chief Executive Officer. The company is headquartered in Woodland Hills, California.

About Rho Ventures
Since 1981 Rho Ventures (http://www.rho.com) has been investing in leading edge, high growth companies that redefine the status quo. The firm has a deep history of supporting companies at multiple stages of growth spanning early stage investments to later stage expansion and growth equity transactions. Rho Ventures has financed approximately 200 companies and has invested in market leaders across many high growth sectors including information technology, communications, new media, healthcare and energy technology.

About VantagePoint Venture Partners
VantagePoint Venture Partners (http://www.vpvp.com) provides creative growth strategies and capital to companies transforming global markets. With more than $4.0 billion of capital under management, the Firm invests in entrepreneurial companies at all stages of development in the CleanTech, Digital Media/Internet, Healthcare, Semiconductors and Wireless sectors. VantagePoint partners with talented entrepreneurs who are seeking to build companies that are world-scale in both size and substance.

Press Contact:
David Glaubke,
Director of Corporate Communications
ReachLocal, Inc.
(818) 274-0260 x 1136
dglaubke@reachlocal.com