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Mar 7 2006
ShopLocal Redesign and the 'Offline' Future of Online Shopping
I have seen the future of online shopping and it's ShopLocal. OK, so maybe that statement is somewhat overblown, but it's essentially true. Newspaper-owned ShopLocal just relaunched with a new and improved design and interface. The site offers both online and local deals on a range of products. Consumers can browse newspaper inserts, content from merchant feeds and compare online and local deals.

I can see how much it would cost to buy that laptop online and, with a click, compare those prices to local retailers (with an emphasis on big boxes right now). However the site does increasingly offer true local business information. And that's an area ShopLocal is working to build out.

Froogle, CNet, Interchange Corp.'s Local.com and AOL's Pinpoint Shopping, which both distribute ShopLocal content, and ShopLocal's newspaper affiliates (e.g., Knight Ridder's Mercury News) offer local/offline shopping information. So do Cairo.com and Yokel.com. But the major shopping engines and portal sites are going to need to introduce this "local shopping" content to be competitive over the long term. StepUp.com and Channel Intelligence are two companies working to provide that offline data about merchants and inventory information.

In its redesign, ShopLocal has done a good job organizing and presenting a huge amount of content and visual information in a clear and generally intuitive way. It cannot be disputed that consumers want this local shopping content. According to research conducted in 2005 by Yahoo!, in certain "commodity" categories, consumers may convert or transact online in as many as 50 percent of the cases (depends on the specific category). However, in "high consideration" categories that number drops to 30 percent or below.

The Kelsey Group's research indicates that with purchases over $500, where the Internet is the starting point, over 90 percent of the transactions finish offline. And, my favorite statistic these days: e-commerce represents only 2.5 percent of U.S. retail � despite the growing influence of the Internet over consumer shopping behavior. Clearly the majority of Internet-influenced transactions are happening and will continue to happen offline.

An indication of consumer demand for local shopping information is ShopLocal's rising U.S. traffic (per comScore, August 2005):
  1. Shopping.com sites (eBay)
  2. Shopzilla/BizRate sites (E.W. Scripps)
  3. Yahoo! Shopping
  4. NexTag sites
  5. inStore (AOL)
  6. PriceGrabber
  7. ShopLocal (Gannett, Knight Ridder and Tribune)
  8. Froogle (Google)
  9. CNET Reviews
  10. Monster Marketplace.com
These data are now relatively old, so I would expect ShopLocal's ranking to be rising further.

At the upcoming Drilling Down event, we'll be exploring the relationship between the Internet and offline transactions in the panel, "The New �Purchase Funnel�: Online Shopping, Offline Conversions," featuring:

  • Kendall Fargo, CEO, StepUp.com
  • Brian Hand, CEO, ShopLocal.com
  • Catherine Kelly, Chief Technology Officer, HarvestINFO
  • John Kim, Sr. Director, Advertiser Product Marketing, Yahoo!
  • Search Marketing
  • John Melideo, CEO, Jambo
  • Rob Wight, CEO, Channel Intelligence
Blog: Local Media Blog
 
posted by  Greg Sterling at  04:30 | permalink | comments [0] | trackbacks [0]



Mar 6 2006
Verizon Enters Nashville
Charles Laughlin pointed out an article from the Nashville Business Times about Verizon's entry into that market. Kathy Harless identified Nashville as one of the expansion markets at DDC '05 in her keynote address. Here is the article.
Blog: Global Yellow Pages Blog
 
posted by  Neal Polachek at  13:08 | permalink | comments [0] | trackbacks [1]



Mar 6 2006
2006: The Year of M&A?
Just the latest in what appears to be increasing M&A activity, NBC Universal announced that it is buying iVillage (soon to be Women.com) for $600 million. That marks three deals in four days: Fox Interactive Media on Friday, AT&T on Sunday and today NBC.

What it reflects, I believe, is that the Internet's credibility and centrality to the future of marketing and distribution have been firmly established and the larger traditional media players are starting to wake up to that and are getting scared about being shut out or having to rely exclusively on third-party relationships (e.g., Google, Yahoo!, Apple).

Fox and NBC want to control their fates (as do other major media companies) and position themselves as much stronger competitors going forward. They're trying to set that up by making acquisitions. What this means to me is that we're going to see quite a few more acquisitions this year.

By the end of the year, the online world could look quite different from how it does today.

___________

Update: Hearst buys UK consumer health destination NetDoctor. Expect it to launch a US site in the not-too-distant future.
Blog: Local Media Blog
 
posted by  Greg Sterling at  08:43 | permalink | comments [0] | trackbacks [3]



Mar 5 2006
TPI Suitors Line Up
A long list of potential suitors for Telefonica Publicidad e Informacion has emerged that invokes Claude Raines from "Casablanca": "Round up the usual suspects !" The parade of private equities whose names are listed among those at least interested in the deal includes many that have been associated with other past deals as buyers or also-rans � CVC Capital, the Blackstone Group, the Carlyle Group and so on.

Currently Telefonica, Spain's leading telecom, owns a 60 percent stake in TPI. Telefonica, surprise, wants to offload its majority shares in TPI to reduce debt.

Also reported to be interested are France Telecom (which is the majority owner of publicly traded PagesJaunes), and Yell Group, working in concert with the private equity Apax Partners (a former part owner of Yell). Those would lead to some interested pan-European combinations.

TPI, a public company, is the dominant directory player in Spain, with a large and growing presence in directories in Latin America. It also recently launched a competitive DA business in Italy.

Blog: Global Yellow Pages Blog
 
posted by  Charles Laughlin at  16:05 | permalink | comments [0] | trackbacks [1]



Mar 5 2006
AT&T + BellSouth = US$5.8B Publisher
The story is all over the financial press today that AT&T will acquire BellSouth for US$67 billion. Based on 2005 revenues, the combined Yellow Pages divisions of the two companies will have total revenues of about US$5.8 billion. I'd say this will make it the world's largest directory publisher, but that was already true of AT&T's US$3.7 billion Yellow Pages division. The newly enlarged publishing unit will be the incumbent publisher in 21 states.

This deal is not exactly a surprise, since it was widely reported that SBC (before it acquired AT&T and adopted its name) made a run at BellSouth before it pursued the AT&T deal. And AT&T and BellSouth's Yellow Pages operations already jointly own YellowPages.com, a deal that led to much speculation that it was a precursor to a combined Yellow Pages operation. Well, that now appears to have happened, even if Yellow Pages was not a driving force in the transaction.

We will have a lot more to say about this deal in this week's Local Media Journal. This is a big one.
Blog: Global Yellow Pages Blog
 
posted by  Charles Laughlin at  15:53 | permalink | comments [2] | trackbacks [1]



Mar 5 2006
AT&T to Buy BellSouth
According to a story in today's New York Times AT&T (formerly SBC) is near a deal to acquire BellSouth:

AT&T is expected to pay about $65 billion for BellSouth, the country's third largest phone company, which operates in a nine-state region in the Southeast. The price represents a 25 percent to 30 percent premium for BellSouth shareholders.

The Times is reporting that a deal may be announced as early as Monday. The combination would create (recreate) a communications giant with combined estimated Yellow Pages revenues of roughly $5.6 billion and approximately 3,800 sales representatives. Both AT&T and BellSouth have DSL partnerships with Yahoo! (both also have IPTV initiatives). AT&T has a market cap of $91 billion, while BellSouth is worth approximately $56 billion today.

There were numerous rumors of earlier, failed discussions between the two companies. And there has been considerable speculation in the recent past that the two companies would combine and spin off their directory divisions at some point in the future. It's not clear to me whether this deal, if it were to happen, would make that more or less likely. (My colleague Charles Laughlin would have a more nuanced perspective on that issue. However, telco parents have sold directory assets to pay down debt in many instances in the past.)

The Wall Street Journal (sub. req'd), says:

AT&T is targeting at least $2 billion in cost savings in BellSouth deal, said a person familiar with the matter Sunday ... The total equity value of the deal is at least $65 billion, plus the assumption of an additional $17 billion of BellSouth debt.

The two companies have a parternship in the newly re-energized YellowPages.com (and Cingular, to become AT&T wireless). And I could imagine a combined company becoming more active and making some intreresting online acquisitions to better position itself on the Internet. In fact I could imagine a fairly major acquisition in the search space.

We'll go into all aspects of the transaction, including the competitive implications, if it's confirmed, later this week.

________

More from Reuters, MarketWatch, USAToday and many others. Here's another N.Y. Times piece (reg. req'd) that has a great deal more detail and some additional features.

Thus far in my "career" as a blogger I have resisted the urge to use the term "grok." But now I break that solemn vow with: Om "groks" the deal.
Blog: Global Yellow Pages Blog , Blog: Local Media Blog
 
posted by  Greg Sterling at  12:36 | permalink | comments [1] | trackbacks [26]



Mar 3 2006
Fox/News Corp. Online Buying Spree Continues
From Techcrunch ... FIM CEO Ross Levinsohn announces he's bought one of the companies on the list (scroll) and may buy more. More M&A to come ...

The company was NewRoo (a personalized news aggregation site). SiliconBeat has more.
Blog: Local Media Blog
 
posted by  Greg Sterling at  19:42 | permalink | comments [0] | trackbacks [1]



Mar 3 2006
Legal Category: Cause for Concern?
As I was doing some research on attorney spending online I stumbled across this blog on legal advertising, which basically argues with some anecdotal evidence that the print directory is delivering less value to lawyer-advertisers today than it has in the past:

I get calls every week from lawyers saying they�re not getting calls anymore from yellow page advertising. They don�t want to continue wasting their money, but they�re afraid to stop advertising and lose their spot. They want to know what�s going on and what to do.

I have no idea whether this blog is truly reflective of the feelings of lawyers generally or has any influence in the legal community. But the sentiments should be noted and are a cause for concern because lawyers spend more than $1 billion annually on print Yellow Pages and legal is, in fact, the top revenue category (lawyers-attorneys is the sixth most popular consumer category).
Blog: Global Yellow Pages Blog
 
posted by  Greg Sterling at  19:12 | permalink | comments [0] | trackbacks [1]





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