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Feb 15 2006
Kelsey Group Forecast
We put out a press release this morning highlighting some top-level numbers from our forecast released to clients late last week. Here are some of the numbers featured in the release:

  • Global print Yellow Pages revenues will increase 1.5 percent from $26.3 billion in 2005 to $28.4 billion in 2010.
  • Global local search revenues (Internet Yellow Pages, local search and wireless) will increase 30.5 percent from $3.4 billion in 2005 to $13 billion in 2010.
  • Global classified advertising revenues will decrease 0.2 percent from $79.5 billion in 2005 to $78.5 billion in 2010.
  • Performance-based phone leads or "pay-per-phone call" revenues are expected to grow to $3.7 billion (in both online and offline media) by 2010 (this is U.S. only).
All percentages above are compound annual growth rates (CAGRs).

We added classifieds to the forecast this year because it involves the same user mind-set/behavior as Yellow Pages and Search: a user has a predetermined need/interest and is looking for a provider/seller to fulfill that need.

We also expanded the definition of "Local Search" to encompass online YP, search engines and wireless (mobile local) for similar reasons.

In the past we had been using the term "Local Search" in a broad sense to capture all these but simultaneously in a more narrow sense to refer to geotargeted lookups on search engines alone. That created some confusion in the marketplace. Also, the "form factor" between the IYPs and the local products of search engines are becoming virtually identical on the front end and the Yellow Pages Assn. has adopted the term "local search" as a branding/marketing vehicle as well. Ultimately, we probably will include classifieds engines in that category. But for now we declined to include them because of potential confusion and dilution of the term.
Blog: Local Media Blog
 
posted by  Greg Sterling at  10:00 | permalink | comments [2] | trackbacks [0]



Feb 15 2006
A Few Newsbits
Search and Win: A story that's circulating today is one about the prospect of MSN and Yahoo! "incentivizing" users to switch to their search engines with rewards and prizes. MSN is further along; Yahoo! floated what might be called a "trial balloon" on the subject. Nielsen's Ken Cassar thinks the general idea is "smart promotion." Others have been critical of the idea as one that smacks of "desperation." (This is the common journalist question: "Doesn't this suggest desperation?")

I wouldn't say it's a desperate move; I would say it's an effort to get attention and motivate users to show up and try the engine. Many people argue there's effectively no difference between the top search engines' results (Infospace disagrees). And there's plenty of data that says there's effectively no search engine "loyalty" out there. I think there's a great deal more nuance here, but it's a much longer discussion.

Here's my view: Prizes might be a good marketing hook, but they aren't going to win over users permanently or cement loyalty longer term. The search experience itself has to deliver value and be as good or better than the preferred engine (read: Google in many cases). There's also the danger of what might be called "search fraud" by users just seeking to fulfill requirements to qualify for incentives/prizes. This danger will diminish or destroy the credibility of the engine with marketers over time.

AOL the Conversions King: Analytics firm WebSideStory reported (consistent with a similar report last year) that AOL had the "best conversion rate at business-to consumer e-commerce sites" of the four major portals/search engines. Here are their data:

  • AOL Search (6.17 percent)
  • MSN (6.03 percent)
  • Yahoo (4.07 percent)
  • Google (3.83 percent)

The WebSideStory explanation of this (user demographics/intent) isn't entirely satisfying. However, one might explain the difference in the fact that Google is perceived as a starting point for research, while AOL, Yahoo! and MSN to varying degrees are destinations that keep people on their sites longer. According to Nielsen, here are the relative, average amounts of time (minutes) spent on each:

  • AOL Search (2:16:49)
  • MSN (0:37:29)
  • Yahoo (1:09:19)
  • Google (0:18:40)

Google Schadenfreude: Since Google missed the sky-high expectations of Wall Street in Q4, there's a distinct quality of "schadenfreude" (pleasure at the misfortune of others) in the air. Barrons caused a further decline in GOOG when it speculated that competition would weaken Google's market position this year. There's nothing new or especially thoughtful in the article. It's simply that investors may now be nervous about future performance and are selling (GOOG is off about $130 from its 52 week high).

Also, John Battelle, who owes Google quite a bit for his current status as best-selling author and search "guru," argues now that Google had "jumped the shark" given its appearance on Time magazine's cover.

Lining the halls of Google are high-profile magazine stories dating back to 2000. (The Time cover is nothing particularly special or significant.) Google will succeed, grow or fall to earth largely based on the actual value (quality of search, tools and services) it provides to users and how the competition stacks up. The danger as I see it is that Wall Street's distorted expectations will cause the company to do things (to produce growth/revenues) that are not in the long-term best interests of the user experience and, ultimately, the company.

Nokia Wi-Fi Phone: This week Nokia announced a Wi-Fi phone that offers can "travel" between cell and Wi-Fi networks. Carriers DO NOT LIKE this development and it's a parallel one to VoIP on the fixed-line side of the house. But because they do not control the handset makers and because there's competition and potential demand for these phones, this is a development that they cannot prevent. Thus there will be more pressure on wireless carrier revenues (both on voice minutes and data use). The only real question here is: Will Wi-Fi networks proliferate to make them real alternatives to cell networks on these phones?

PC vs. TV: Reported in today's MediaPost (reg. req'd) is a piece of research that argues consumers want to be able to watch movies and TV on their PCs and vice versa:

25 percent of Internet users are interested in watching downloaded TV shows and movies on their PCs, 38 percent expressed interest in watching that same video on their TVs.

WebTV was largely a failure because of the bad user experience. The opportunity this time is to build a Web-surfing capability into IPTV, cable, etc., that combines the best of both worlds.

This leads me to another "shameless plug" for our coming Drilling Down conference and the session:

Who Will Own the Living Room?
The battle for the living room has begun with cable companies, telcos and search providers, among others, seeking to control the pipe, the programming and the advertising channel to the local audience. Will people hook up their PCs (or Macs) to their TVs? Will telcos succeed in installing IPTV and gaining share versus entrenched cable companies? Or will cable providers, arguably in the dominant position today, extend their dominance in TV to local advertising delivered through the living room?
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:44 | permalink | comments [1] | trackbacks [0]



Feb 14 2006
IPTV News Roundup
The video and IPTV news inundation continues. Here is this week's roundup;

--"Punk'd" and "Beauty and the Geek" creators Ashton Kutcher and Jason Goldberg will team up with AOL to deliver five new programs exclusively on AOL.com.

-- ZDNet has an interesting piece on what John Nicol will do for MSN's video and multimedia efforts.

-- Business Week reports on Cisco's move into the IPTV space through this interview with senior vice-president Mike Volpi.

-- This interesting piece from Media Daily News explores the cultural differences that exist between traditional television ad sales, and the new IPTV paradigms emerging.

-- Disney spin-off MovieBeam announced (reg req.) an on-demand service that will make movies available through a special set top box the same day they're released on DVD.

-- Comcast has announced it will add geographically targeted ads to some of its video on demand content.

-- Olympic winning runs and highlights can be seen on the games' official site here.

-- Lastly, A Harris interactive study came out with some interesting numbers on how IPTV is being recognized and anticipated as an attractive alternative to cable and satellite.
Blog: Local Media Blog
 
posted by  Mike Boland at  13:40 | permalink | comments [1] | trackbacks [0]



Feb 14 2006
A Whole New Kind of Speed Dating II
If anyone is interested to see how last night's TiVo event went that we blogged about on Friday, here is coverage from Thomas Hawk's Digital Connection.
Blog: Local Media Blog
 
posted by  Mike Boland at  13:24 | permalink | comments [0] | trackbacks [0]



Feb 13 2006
First Signs of Google Click-to-Call
Seth Godin (found via SEW) reports on a Google click-to-call option that is being served up with some sponsored links. He gives an example of sponsored search results that instead of links, include a small phone icon (same icon used to place calls in Google Talk) which can be clicked to open a small Ajax-based window for initiating a call between the user and a business.

A phone number must be entered the first time it is used, but it offers the ability to save that number so subsequent uses are easier (and truer to the term "click-to-call"). To see this in action, note that Godin's says to do a search for "Artisan Hotel" (without geographic modifier). I assume he did this from New York, because when I did this search from San Francisco, I ended up with different search results. The way around this if you are in a location that gives you geographically relevant links that don't include these click-to-call examples, just add a New York zip code, or the words "New York" (or just follow this link). Then you'll see what he's talking about and be able to give it a whirl.

Google appears to be testing it on a limited basis (which we already knew it was doing), but this is the first sign of it. It could be an intriguing cross-platform offering to entice existing AdWords customers, and more notably the large segment of SME advertisers that prefer calls to clicks and currently aren't "sold" on AdWords. On another level it extends Google's growing list of options and platforms offered to local and national advertisers that now include print magazines and radio, and will likely soon involve television or video (look for the company to acquire or develop something similar to Spot Runner soon). From a consumer facing standpoint, the user experience could likewise be groundbreaking given the sheer mass of Google users.

There will be a consumer adoption learning curve however, as there is with most new technologies, and which there certainly is with internet telephony. But it's important to note that this isn�t VoIP, as the click-to-call tool we�re talking about initiates a call between a business and a phone number that a user provides. But it�s certainly a step towards VoIP.

That little green phone icon that signifies click-to-call in these new search results is the very same one that represents a PC-to-PC call when it appears in Google Talk. The search click-to-call could evolve into something similar where instead of a call initiated between a business and a consumer land line, an outbound call is made directly from the user�s computer � building on the technology currently available in Gtalk.

Search as a point of entry into the whole Google experience, could therefore push along the mainstream adoption of VoIP overall because it will show mainstream consumers that VoIP isn�t so scary. This is the very strategy behind introducing VoIP in an IM context, as we pointed out in a recent advisory. Once it becomes mainstream, it can be fully leveraged and monetized across IM, email, search, local, and mapping products. And the advertising models built around click-to-call will be the monetization lever.

In the meantime look for those little green phone icons to start to multiply across the Googleverse.
Blog: Local Media Blog
 
posted by  Mike Boland at  23:58 | permalink | comments [0] | trackbacks [0]



Feb 13 2006
Windows 'Expo' Replaces 'Fremont'
A little while ago I got a peek at the successor to Microsoft's classifieds marketplace "Fremont." The new site is being called "Expo" and offers a number of advancements and enhancements over the original incarnation of MSN classifieds. It was described as a "locally relevant social marketplace."

My understanding is that site won't go live for a couple of months, which is a bit of a disappointment, but it offers some tantalizing possibilities. It's classifieds + community + chat + maps + personalization. (The site also features local events.)

Windows Live Local maps, including Birds Eye photography, is integrated into Expo, which will be especially relevant in the apartments/homes category. Chat, a really valuable feature, requires both buyer and seller to have MSN Messenger (and could become a promotional tool for Messenger). Microsoft has also integrated Expo with MSN Spaces -- you can present your listings via an icon on your Spaces blog (and there's similar functionality for Messenger).

I was told that Expo listings would be integrated into Live Local and I asked whether the opposite would be true. That is being considered. The business model is contextual advertising from Kanoodle right now; but may include premium placement and/or Craigslist-style charging for selected verticals like Jobs.

Basic listings are free (now standard for online) and they include the ability to add images. The listings set-up process, which requires Passport registration, was pretty simple and fast.

The product will launch in the U.S. but ultimately will be global and will thus compete with eBay's Kijiji sites. But right now Expo has more functionality. The challenge is getting the content and building the user base. But the huge installed Messenger base should jump start that process for Microsoft.

Given all the advanced capabilities and potential content richness it's quite possible that this product could become more popular than Live Local. (There's the beginning of a services directory.) But the opportunity for Microsoft is to integrate the two products to build a kind of "uber-local marketplace" (not very "Web 2.0" I realize), where both local business listings and classifieds information would reside.

That would create more convenience and utility for local users who don't, generally speaking, want to go to one site for this, one site for that and five other sites for the other thing -- if they can get all their needs met in a single location or destination.

For the time, the market share distribution of general Web search seems to be fixed. But local is still in its early stages and there's still lots of opportunity. Apple has proven you don't have to be first to market to become the market leader. So if Microsoft can build a great and complete local product it has a chance to differentiate itself and gain consumer traction, which has to date eluded it in the general search arena.



Blog: Local Media Blog
 
posted by  Greg Sterling at  17:34 | permalink | comments [1] | trackbacks [0]



Feb 10 2006
IPTV Quick Hits
News from the IPTV world continues to come at us with no signs of slowing, as the industry's many moving parts take form. There are content issues with rights and aggregation; technical issues with bandwidth and video delivery; and local and national ad delivery and the valuable targeting that IP technologies enable. These issues will be addressed at the Kelsey Group's Drilling Down on Local Conference in March in this panel;

1,000,001 Channels: But Is Anybody Watching?
TV used to be simple for everyone. But the newly fragmenting world of video search, mobile TV, on-demand cable and IPTV makes the range of potential consumer choices staggering. What are the new technologies that are rapidly turning TV from a mass medium to one that is highly personalized? What is the new consumer �video consumption� model, and what are the implications for networks, content producers and advertisers? Will a million �Wayne�s Worlds� and the potential �Tower of Babel� effect destroy the medium for advertisers or open it up to a range of exciting new possibilities, including some for SMEs?

But for now, here are a few news bits from across the industry.

-- SlingShot Media was founded by former Yahoo! execs to act as a sort of Hollywood talent agency that will bring together talent and content for online and mobile distribution. The company's contacts in both Hollywood, and in the online world are hoped to create value in bringing the right content to the right online distribution channels. Given that content aggregation is an ongoing challenge with IPTV, this middleman or agent type of model could be one that grows (apart from the self published long tail type of content that will have a separate place among the Google Video-type offerings).

-- Videobomb.com has launched with an interesting model that is similar to the online news site digg.com, which places aggregated news items (without human editors) in order of popularity, or hits. The site hasn't been monetized yet but will likely be ad supported in the future.

-- NBC Universal has formed a content partnership with Aeon Digital which has an entirely new model for IPTV delivery. The service requires a one time fee of $299 for a set top box that connects to a broadband line. Users can then access on demand music, television, and movies for an additional fee. It also comes with a built in DVR.

This is somewhat similar to offerings by DaveTV and Akimbo, and like them it will face challenges to survive in IPTV's next generation. When telcos launch their IPTV services later this year, the IPTV world will be divided between their closed system service offerings (video watched on your television with a set top box and a range of channel choices), and video viewed on your computer screen that will encompass most of the long tail content out there.

Services such as Aeon fall somewhere in between, and have deficiencies when stacked up against Telecos and the online aggregators. Their revenue models also aren't as flexible, having only fee based content. Telecos and online aggregators by comparison have existing channels for ad delivery (including targeted and local ad delivery which will be an important attribute of IPTV), and fee based video on demand. As we've said in the past, this flexibility in charging customers will be important in experimenting with revenue models and consumer preferences.

--Lastly, Disney has expanded the video content available disneychannel.com by making full episodes of some kids programming available for free. It will be ad supported and allow advertisers the ability to stream full-length or customized spots next to content. More here
Blog: Local Media Blog
 
posted by  Mike Boland at  12:10 | permalink | comments [1] | trackbacks [0]



Feb 10 2006
A Whole New Kind of Speed Dating
From the bizzare item of the day dept., TiVo is setting up a promotional event on Monday (close enough to Valentines day), that mixes speed dating and well, TiVo.

The event will match San Francisco singles with "their perfect TV compatable Valentine". Basically this means that they'll wear name tags that list favorite shows, and work the room with a list in hand that indicates who would be a good match for them.

So the idea is that the speed daters can "fast forward" through the crowd to find their TiVo-suggested match. Clever TiVo.

And don't worry, other TiVo trademarks have been worked in for maximum promotional bang for their buck, such as thumbs up and thumbs down stickers that singles can use to privately rate those they meet.

This likely isn't something that will take the dating vertical by storm, but it's a quirky item that's good enough for a laugh on a Friday.

And who knows, television for some is a central part of life and looking for a match that likes the same shows could prove an effective way to meet that special someone. But probably not. We'll see...
Blog: Local Media Blog
 
posted by  Mike Boland at  11:08 | permalink | comments [1] | trackbacks [0]





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