NileGuide CEO Josh Steinitz declines to disclose the terms of the deal, but says Localyte management “obviously have a stake in our success.” He says it will be determined after a 90-day transition whether the Localyte team will stay on with NileGuide.
The assets acquired include the Localyte website, the community of Localytes contributors, the technology behind the destination recommendations and Localytes rewards, as well as the Localyte iPhone app, Pocket Sherpa.
Founded in August 2007, Localyte is funded by Tandem Entrepreneurs.
Steinitz says NileGuide had been approached by “lots of companies” looking to be bought or seeking partnerships, but NileGuide “finally pulled the trigger” and bought Localyte because it is a strategic acquisition.
The value proposition of Localyte is in its user-generated content with thousands of Localytes — local experts who might be tour guides, business people, restaurant owners — who connect with travelers and answer their questions for free.
Steinitz says while NileGuide has local experts in major destinations, the Localytes have expertise in “third and fourth-tier travel destinations” where it is “harder to build compelling content from existing data.”
Localytes answer travelers questions such as, “Where is the best volcano walk in Guatemala?” Steinitz says. They aren’t supposed to promote their businesses in their answers, but can tout them in their profiles.
Currently, Localyte users can rate Localytes on their answers and eventually NileGuide will launch a program where Localytes can take the points they earned from their ratings and redeem them for performance-based advertising on NileGuide, Steinitz says.
Steinitz says NileGuide plans to invest in the Localyte expert program, which counts “tens of thousands” of experts, and plans to bring that contingent of experts “north of 100,000.”
The Localyte expert program complements the NileGuide Local Experts program, Steinitz says, and the best Localytes will be able to “graduate” into the NileGuide program, where they would get paid a flat fee and receive performance-based incentives.
NileGuide clearly was more interested in aggregating Localyte’s content than its existing traffic, which amounted to less than 11,000 unique monthly visitors in March 2010, according to Compete.
The mashup of NileGuide and Localyte pairs two PhoCusWright Travel Innovation Summit participants.
NileGuide took part in the event, which features travel startups, in 2008, while Localyte presented at the summit in 2009.
Steinitz says the two brands will remain independent for now, although Localyte content will be “cross-pollinated” into NileGuide.