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Feb 2 2006
StepUp to the Future of Online (Local) Shopping
When StepUp launched a couple of years ago with the intention of delivering real-time inventory information and product availability to the Internet it was met with considerable skepticism, along the lines of "yeah, how are they gonna do that?" and "good luck."

But now that the company has a deal with Google to provide local shopping information, it's clear that other shopping search engines have to take notice. (CNet and Yokel offer versions of this.)

As we've pointed out before, e-commerce (though impressive and growing) is only 2.5 percent of all U.S. retail spending, according to the U.S. Commerce Dept. (Forrester has a somewhat larger number). It doesn't matter, however, whether the actual number is what the U.S. says it is or Forrester's larger projection. Even in the most "optimistic" scenario, online shopping is no more than 5 percent of total retail spending.

Yet our data show that 70 percent of local consumers (which is everybody ultimately) are using the Internet to find products and services locally. That doesn't mean they're not using other traditional media. However, it does mean they're online doing research and price comparisons � and then spend their money in a physical store (whether it's a mom-and-pop or a Best Buy).

So what does this mean? It means that consumers are generally not finding information about where they can buy products locally online or they're having great difficulty in doing so.

Google's decision to be "agnostic" about whether consumers buy something online or locally is smart, given consumer interests and behavior, and I would expect other shopping engines to follow suit this year.

If they don't they may put themselves at a competitive disadvantage and potentially leave money on the table. E-commerce isn't going to take over the world as everyone once thought; it's just one channel.

The far larger channel � but increasingly influenced by the Internet � is offline/local shopping.

__________

Some interesting data compiled by eMarketer on multi-channel/big-box retailers.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:51 | permalink | comments [0] | trackbacks [0]



Feb 2 2006
WLL Super Bowl Mashup
Here's a fun and timely one: The Windows Live Local Super Bowl mashup. (So there's a football pun/joke in there, but I'm going to leave it alone.)

Here's the official MSN/WLL word on the site:

[MSN has] created a Super Bowl mashup to help the thousands of fans expected to travel to Detroit for the game navigate their way around, look for parking, hotels and directions to the stadium, as well as find good places to eat, drink, or to pass the time before Sunday�s game ... [P]eople can view a map of Detroit with information on local attractions, such as the Motown Museum or the Detroit Opera House. Also, we�ve just added Detroit to the list of major cities with birds-eye aerial imagery.

I continue to be amazed by the "bird's-eye" imagery. Too bad it's not real time so you can actually see how many parking spots are left in that Historic Trinity Lutheran Church parking lot.

Blog: Local Media Blog
 
posted by  Greg Sterling at  07:03 | permalink | comments [0] | trackbacks [0]



Feb 2 2006
Simply Hired Is Simply Fascinating
A couple of days ago I met with Simply Hired. Beyond some interesting things that they were telling me about their roadmap, I was fascinated by the "vertical"' vs. "horizontal" search discussion we had.

My personal belief is that the more verticals there are, the more people will "default" to general search engines because they're overwhelmed and confused. However, there are lots and lots of interesting things going on in "vertical search" or verticals where search is the primary navigation tool.

Simply Hired is a "metasearch" engine for jobs (job search is inherently local), but on top of search results the company is building lots and lots of added value. In other words, aggregating the listings from multiple providers (including the big three) is just the beginning.

Look at this result for "marketing" + "new york." Beyond the filtering of results by selected criteria (e.g., location, education level, company size, etc.), one can save jobs, rate jobs, map jobs, virally e-mail jobs, do salary research and, perhaps most significantly, network via linked-in (find contacts who work or have worked at the company).

All these additional job-specific services illustrate the value verticals can bring to the user experience that is hard for general search engines to duplicate for many reasons.

As I've remarked before, we're seeing the development of an "ecosystem" in which the general/horizontal search engines are where many "verticals" are discovered by consumers and in the subsequent exploration or drill down within the vertical is where the potentially best hand-off is to the advertiser (or at least this is the vertical argument. But this is seemingly proven in IYP contexts; IYPs aren't a "vertical" per se, but see below.)

In this "vertical environment" is also where you're likely to find the bulk of local businesses going forward, for many reasons. (This applies to newspapers and Yellow Pages sites as well, which are obviously not "verticals" but stand in the same relation as verticals to general Web search in the broader structure of the ecosystem.)
Blog: Local Media Blog
 
posted by  Greg Sterling at  05:12 | permalink | comments [0] | trackbacks [0]



Feb 1 2006
Newspapers Are Mad at Search Engines
I saw this article this morning but was racing out to a meeting at StepUp.com and so I didn't have time to do a post earlier. From Reuters:

The Paris-based World Association of Newspapers, whose members include dozens of national newspaper trade bodies, said it is exploring ways to "challenge the exploitation of content by search engines without fair compensation to copyright owners."

Web sites like Google and its specialized Google News service automatically pull in headlines, photos and short excerpts of articles from thousands of news sources, linking back to the publishers' own site. Google News does not currently carry advertising.

"They're building a new medium on the backs of our industry, without paying for any of the content," Ali Rahnema, managing director of the association, told Reuters in an interview.

"The news aggregators are taking headlines, photos, sometimes the first three lines of an article � it's for the courts to decide whether that's a copyright violation or not."


While this attitude (and the frustration behind it) is certainly understandable, it's unlikely that a litigation-oriented approach will be successful as a strategy for newspapers in the long run.

This is a larger version of the Craigslist-Oodle aggregators vs. content producer debate. (And see Jakob Nielsen's anti-search screed as another salvo in this same debate.)

The newspapers (at least as represented in WAN's public statements) are frustrated that Google, Yahoo! and others appear to be reaping the benefits of their content creation while they struggle to maintain subscribers and defend against advertiser defections. But it's a mistake to simply say, by implication, our industry's challenges and problems can be attributed to news aggregators that take our content for free.

I'm quite sympathetic to newspapers and believe that news organizations have a critical role to play in democratic societies and thus need to succeed and thrive online (The N.Y. Times broke the NSA wiretapping story, not a blogger and not TV).

If the newspapers can collectively negotiate some financial/content licensing arrangement with news aggregators (one of which, Topix, is owned by newspapers) that's great. However, ultimately, they should focus on delivering value to their users and advertisers and working together to create networks to leverage their traffic � rather than on legal efforts to block or tax the collection and distribution of their content.

Litigation in this case is not a competitive strategy; it's a form of denial.

___________

Danny Sullivan at Search Engine Watch does a nice roundup of the coverage of the "newspapers want search engines to pay" story.

My colleague Mike Boland points me to this news aggregation aggregator. :)

And, from the other end of the spectrum, AT&T raises the toll road question again per Om Malik.







Blog: Local Media Blog
 
posted by  Greg Sterling at  18:59 | permalink | comments [0] | trackbacks [0]



Feb 1 2006
Notable VoIP Happenings
Google�s well-publicized earnings announcement yesterday overshadowed another notable piece of news about the company. The San Jose Mercury News reported that Google is working with Florida-based VoIP Inc. to possibly add voice calling to its network of offerings, which can be seen as a step toward bolstering its search advertising with pay-per-phone-call.

Google currently offers PC-to-PC calling through its Google Talk IM client that was released in April. But adding PC to PSTN (land line) would bring it closer to click-to-call functionality, a key underpinning of a PPCall model. SEW reminds us that Google has been testing click-to-call since November.

Given that many small businesses prefer calls to clicks, this could be a powerful tool in leveraging the base of SME advertisers that already participate in its AdWords program and could appeal to the larger segment of SMEs that haven�t been enticed by the promise of clicks. It could also be more disruptive to directory publishers whose businesses thrive on such SMEs.

BusinessWeek meanwhile reported today that Microsoft has a similar plan up its sleeve to integrate PC-to-PSTN calling to its e-mail and IM clients. Also notable is the possible VoIP integration into its Windows Live Expo classifieds service that hasn�t officially launched yet.

From BusinessWeek:

It will allow people to find buyers and sellers who are connected, even if distantly, to their social network of IM buddies or e-mail friends. For example, a user could see if a pal or member of another friend's social network has a sofa for sale.

Where VoIP comes in: In addition to e-mailing the sofa seller, the Live Expo user can lob a call directly from a PC. Currently in an internal trial, Expo will enable Microsoft to compete with classifieds services Google Base, currently in beta tests, and Craig's List, one of whose investors is eBay.


Indeed, this could be similar to eBay�s possible plan to integrate the VoIP platform of its recently acquired Skype to its auction and classifieds listings.

There are also mobile implications according to BusinessWeek:

Microsoft's VoIP plans even reach beyond the PC. The company is also angling for a piece of the mobile-search pie. Though it involves tiny screens � consumers can use cell phones or personal digital assistants to search the Web � this market has huge potential. It's expected to rise to $1.4 billion in 2010, from $90 million last year, according to consultancy Visiongain.

In other VoIP news, Om Malik reports that Time Warner (as announced in its quarterly earnings report) has added 246,000 VoIP subscribers for the fourth quarter and 880,000 for the entire year, which gives it a grand total of 1.1 million (this class of VoIP service doesn�t involve an IM client or a computer at all, but rather a normal phone that is connected to a piece of hardware to make calls over the Internet. Competitors in this space include Verizon and Vonage). In a separate post, Om also provides some good stats on overall VoIP adoption and projections.
Blog: Local Media Blog
 
posted by  Mike Boland at  15:00 | permalink | comments [0] | trackbacks [0]



Feb 1 2006
'Need Something' Ad Campaign
My colleague Charles Laughlin posted about the YellowPages.com "Need Something" ad campaign when it officially launched earlier this week.

Here's more on the size and reach of the campaign from ClickZ. You can view the online ads here and the TV ads here.

I think both sets of ads are quite effective (in particular the TV spots are clever). It remains to be seen whether the campaign will have the desired impact and help burn the YellowPages.com brand into consumers' minds as a local search destination. At a minimum, I think they will get consumers who are currently unaware of the site to check it out.

As I've written before, there has to be a there there when consumers show up. And the site has made great strides in usability. Yet YellowPages.com must continue to develop itself as a consumer destination to be competitive over the long term. An intuitive URL and great brand are only part of the equation. Of course, Charles Stubbs and his team know this very well.

YellowPages.com is also being quite aggressive in developing a distribution network and recently announced a significant partnership with Yahoo! (an extension and expansion of the previous SBC, BellSouth deals).

Surveying the local online space, we can see not only growth and opportunity, but furious competition as well. It's a very exciting as well as perilous time for traditional media companies, including Yellow Pages publishers, trying to develop their online properties into real growth and revenue engines.

It's great to see YellowPages.com really putting the "pedal to the metal" (to use an old colloquialism) in promoting itself and trying to build consumer awareness.

I believe this campaign is coming at the right time and really has a shot at "priming the pump" but YellowPages.com must continue to innovate and focus on the user experience if it really wants the campaign to pay long-term dividends.
Blog: Local Media Blog
 
posted by  Greg Sterling at  09:43 | permalink | comments [0] | trackbacks [0]



Feb 1 2006
'Point & Search' Part II
Search Engine Journal covers the recent GeoVector/Mapion announcement about "point and search" mobile local technology in Japan.

From the GeoVector announcement:

With Mapion Local Search, users can now walk down the street anywhere in Japan and point at over 700,000 objects such as buildings, shops, restaurants, banks, historical sites and instantly retrieve information on what they are looking at or find what they are looking for just by pointing their phone. Just like one uses a mouse to click on an object on a computer screen and retrieve information, now users can Click on the Real World� using their mobile phone.

There's a company called NeoMedia, which has similar technology, that I wrote about awhile ago. And my colleague Mike Boland previously wrote about "point and search" mobile-local/visual model last year.

What's interesting � and exciting � about this is the way in which this kind of model potentially accommodates the limitations of current cellphones and is relatively "passive" for users.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:57 | permalink | comments [0] | trackbacks [0]



Feb 1 2006
Google Is Human
OK, not exactly. But yesterday's financial results showed the company was subject to the same pressures, market trends and unreasonable expectations that have confronted other Internet bellwethers such as Yahoo! and eBay.

I had expected Google to beat expectations. But the key word here is "expectations." If you look at what the company actually did, the results were impressive. Google revenues were $1.92 billion vs. $1.57 billion last quarter (22 percent growth, up from 14 percent vs. Q2). So revenue growth has accelerated.

These are very solid figures. They're just not mind boggling compared with Google's history of triple-digit revenue growth.

Google investors are a tough crowd � 86 percent growth (vs. last year) wasn't good enough. Admittedly, Google itself has conditioned expectations and set the bar pretty high with its past performance. But it's as if investors are saying the equivalent of "we expect a 100-point game every time" (to use a basketball analogy).

That's just not possible.

There are plenty of reasons to believe that Google's future performance will continue to be very strong. The company has consumer market-share leadership, which should continue for the immediate future at least. And, according to this MediaPost article (reg. req'd) citing an advertiser survey, marketers perceive greater value in Google advertising than in that of its main rivals:

About 71 percent of respondents said that search ads on Google were effective, compared to 62 percent who considered search ads on Yahoo effective and 49 percent who thought MSN search ads were effective.


In addition, WebSideStory asserts that search marketing produces double the conversions of other types of online marketing. Conversion here is defined as the percentage of visitors who click on a search result and go on to make a purchase or conduct a transaction of some sort. That percentage was 2.3 percent. (For every 100 consumers, 2.3 went on to spend money.)

So search can be expected to continue to attract marketing dollars. And it's still very much an "immature" medium; we estimate there are only about 475,000 to 500,000 such advertisers across the globe.

Moreover, the Internet is not going away. While there are challenges to growth on the advertiser side (bringing in more small businesses and so on) consumers show no signs of abandoning the Internet or search engines any time soon.

All these factors point to continued strong performance though perhaps not at the triple-digit levels of the past.

Google set up its bifurcated stock structure to partly insulate itself against the "whims" of the marketplace. (And it doesn't provide guidance for analysts.) That "insulation" isn't entirely working, as the company clearly feels the pressure to perform and explain why it didn't do better than expected.

That pressure should accelerate Google's efforts to diversify some of its revenues and roll out more new consumer and advertiser offerings this year.

Effectively, that means no letup in competition among the major brands (Google, Yahoo!, MSN, AOL), which, as one VC recently put it to me, "are in a feature war," and no rest for those of us who cover them.

____________

More analysis from Andrew Goodman at Traffick and extensive information and analysis from The Internet Stock Blog.

Here's Om Malik's Business 2.0 piece.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:08 | permalink | comments [3] | trackbacks [0]





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