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This following column was provided by Matt Ackerson. Matt is the author of Venture Kid, a blog about entrepreneurs and start-up advice. He currently works at Scrimple, Inc, a firm that creates products and services for the benefit of the local economy.
The future of the internet will become more locally focused. There are four major reasons why this will is the case.
- Everyone in the U.S. is aware of the internet and computers are becoming ubiquitous. Local business owners, even those who are older, are becoming more familiar and sophisticated in terms of internet technology and how to employ it to their advantage. According to Opus research, over 40% of small-to-medium-sized businesses (SMB’s) are advertising online. In the same survey, taken in October, 2008, slightly over 30% said they would be shifting more of their marketing budget online.
- Companies have gradually adapted to the market and are successfully producing web-based services molded to the needs and desires of local businesses. Reach Local is an example of this.
- The volume of users performing local searches on the web is growing significantly. While search query volume grew 20% between February 2007 and February 2008, search queries with local intent grew 76% in the same period of time. Overall, Kelsey Group estimates that 20% of all searches performed online have local intent. These are important numbers for the local economy because it shows that more consumers are shopping or pre-shopping online while usage of traditional media is declining.
- The proliferation of smart phones with embedded GPS technology.
Two subtle factors worth mentioning that are likely to contribute to the growth of this trend are the recession and a growing movement for a sustainable economy (e.g. living and relying on resources closer to home).
These facts demonstrate great opportunity for start-ups and established players to profit, as well as innovate. Plenty are already profiting, fewer are doing much that is truly innovative.
Internet Yellow Pages (IYP’s) are a perfect example of this. Take a large database of contact information, skin it with a slick design, do a bit of SEO and online marketing, and then, presto. It is a common play nowadays, common because it can work reasonably well.
Reach Local (mentioned above), Web Visible, and Yodle take the middle ground on this issue by bringing to market products that show incremental innovation: take the search marketing API’s that are out there, plug them into your site, build some landing page templates, use Adwords and lots of phone calls to get distribution, and presto (Clearly I am over-simplifying).
The same goes for online delivery websites: take orders from customers online and send them through to the business via a fax line. Both online ordering and search engine marketing resale programs are already crowded with competition, but the leaders of the pack are making some nice bank (supposedly Yodle pulled in $30 million in revenue for 2008).
The question remains whether there is the possibility for disruptive innovation in this space. Is a company like Reach Local or Delivery.com the epitome of profitable innovation on a large scale? Are they the "Google" of the local markets? Is it possible to create more innovative, valuable products and services for a market that has been quite slow to adopt internet technology in the first place?
The answer is a yes–we will see more innovation in this space in the future. Why? It is only a guess, but it a guess based on research, personal interactions, and time spent talking with numerous local business owners. In addition, recall the four points above: the progressive and continued blend of the internet and offline commerce is a logical prediction.
Gazing into the future we should remember that web technology’s major benefits will be is the automation or assistance of lab and the potential for cheap and wide distribution (the long tail).
New solutions may disrupt the market by turning online ordering sites or local SEM brands into commodities or make them irrelevant all together. How? Pricing models may be changed (perhaps making such services free somehow), operating costs may drop yielding cheaper and easier integration of SEM / Fax technologies. New competition to the space may address other problems that affect local brick-and-mortar businesses such as weather or seasonal changes. Others may change jobs that humans once had to do in person, such as answering the phone to take orders, and distributing them via a virtual call center.
The possibilities are nearly limitless for the local internet and we have only scratched the surface thus far. The hope is that whatever new web technologies come about in the next few decades, those that target the local economy should do so with more than profit in mind. They should consider the impact their products / services will have on jobs and on the overall quality of life in the local economy.
A new local search and social networking site is later launching today called Center’d. They are calling the launch a "first draft" which is another term for beta. The company describes themselves as, "the only site on the Web that provides an integrated way to manage all the core elements of local planning: picking a place, agreeing on a time, selecting service providers, sending invites, managing volunteers, hosting and communicating."
In all of the materials the company provided, I didn’t see any mention of mobile. Local event planning and search without mobile I see as a mistake.
Center’d has several main content areas. First is a social network that lets you see what places in your local search request are favorites of your friends. You can also create maps that overlay your friend’s locations to create an intense social graph. Second is aggregated reviews from around the Web on local locations. You can also create an event from a search – this could be pretty useful. There’s also a polling tool to find out when your friend’s are available which seems very similar to what Renkoo provides.
Nothing itself seems that innovative but combining everything together might make Center’d more useful than the parts individually. The company is headed by former executives from Yahoo and Microsoft, and backed by Norwest Venture Partners, KeyNote Ventures and private investors.
MyPunchbowl is also in the full-circle event planning business.
Update: VentureBeat has a good review of Center’d.
Yandex. Yandex is the leading Russian search engine with a 70% market share to 15-20%. We briefly covered Yandex along with several other international search engines last October.
I am interested in any questions you have for Ilya. Leave them in the comments and I will make sure to address them when I meet with him tomorrow. It’d be great to get more CN readers involved in the interviews we conduct!
Newsweek takes a look at the dominant search engine in a variety of countries this week. What I see is that Google is winning in some locations and not in others. Many countries are looking at developing their own search engines and lessening their reliance on those from the U.S. Russian search engine Yandex CEO Arkady Volozh says, "In China, Japan, North Korea, locals are still beating Google."
Akiko Kashiwagi notes that Yahoo leads, Google is second and local engines Goo and BiGlobe are trailing and this has caused Japan to look at creating their own search technology. She notes, "This situation has apparently triggered many urgent meetings at Japan’s Ministry of Economy, Trade and Industry, which last April launched a three-year campaign to rectify it by developing Japan’s own search technology. Loosely translated as the Great Voyage Information Project, the campaign reflects the ministry’s belief that a handful of Japanese companies and universities are sitting on technology with whiz-bang potential—if only they would join forces to release it."
It appears that this project is bringing together a variety of Japanese companies on the consortium.
Naver is the leading Web portal including search in South Korea, B.J. Lee reports. Comscore reports that Naver is the world’s fifth largest portal in terms of search-engine queries. B.J discusses just how large Naver is in Korea, "The expertise comes from Naver’s 28 million users. Since 2002, when the portal launched its knowledge-search service, it has collected a database of 70 million questions and answers, which it draws upon whenever a new query comes along. The early start has allowed Naver to grab 75 percent of South Korea’s portal market. More than half of Korea’s 48 million people have logged on. They make 100 million queries each day." Google has less than 2% of the Korean Market. Naver uses human editors to enhance the search results by pushing South Korean results first.
Yandex is the market leader by focusing on the needs of the local market. Yandex occupies 70% of the contextual ads market in Russia. Owen Matthews and Anna Nemtsova note, "Although Google has had an office in Moscow since 2005, it only gets about 15 percent of Russian searches—while the homegrown Yandex search engine gets 55 percent, followed by another Russian company, Rambler, with 17 percent."
A new local reviews site has launched in London. Called "welovelocal" it offers similar functionality to Yelp in the States. It has an absolute Web 2.0 feel to it and all of the edges, both design and functionality, are well done. The site offers users a way to find local businesses and read real user reviews as well.
You can also create a profile and a friends network which helps to show you trusted reviews. Each review has a lot of information about the business. I did note in the video that it would be great if the phone number was clickable to Skype perhpas and if the Tube information clicked over to the Tfl transit planner. A Google map is included to locate the business.
What's also groovy is that if you are the business owner, you can update the details and add more information about your business. Yelp has something similar but WLL seems to offer the ability for more detailed information.
Check out my video review below and leave your thoughts in the comments:
Ted, Dogster CEO, just shot over a mail that Dogster and Catster have launched local search and rating services. It’s kind of like a Yelp for animals. Actually, that would be a good question… why not integrate with Yelp? Pete has some additional discussion on the launch as well.
Ted notes, “Since we did an internal launch over 70,000 pet-friendly listings, have been added, 10,000 reviews written and 1,000 photos uploaded. Do a search on your zip code and see what results show up. Though a primarily a free informative service, which can be especially beneficial to people in a hurry looking for a new vet, kennel or dog park where no login is required, members with pet pages can “mark” the listings that they regularly visit and now packs of dogs and cats photos are associated with locales so people can meet the dog’s they see at their dog park every day. These “markings” are then tied back on the pet’s profile page.
If you love your vet and want the world to know, you can do it here. If you are looking for a vet vetted by dog people, you can do it here. Heck, we even support Microformat hCard support so any visitor can download the listing address right to their desktop address book.”
So why is Dogster such a great example of what to do?
I wrote about Dogster yesterday in regards to their use of Microformats. Why do I think Dogster has worked so well? It’s simple. Ted uses technology as an enabler. Ted does not force technology in front of you. It’s there. You use the site and may never know what’s behind it. And frankly, my guess is that for the Dogster audience, that’s a good thing.
One of the classes I took during my MBA studies spent most of the term discussing the book, “Does IT matter?” by Nick Carr. I think most of us came away with the understanding that technology is an enabler. WordPress is an enabler to let us get our thoughts out, etc. A great example I think is the badges and buttons people put on their site to let us know how “compliant” they are. Blah. Get them off. No one cares :)
Listen to your users, build what they want/need in a way they don’t have to think about it and it’s an extension of themselves and you win. Clearly it’s working for Dogster, so much so that people actually make out that they are the dog or cat to create a diary for the pet.
Ted should start an entrepreneurial blog, I think it would be a huge hit. So much to learn from him. He was my first interviewee on CN and one of the best still.
AOL has moved their local search into Beta mode tonight. And I have to give it to them, it's pretty slick. They are using Mapquest on the mapping technology and as I have said a billion times already this year, Local is where it's at.
What I really like about it is how it refreshes the local options as you move around the map. So start in 10036 (Times Square) and move to 11235 (Brooklyn) and the options move with you. I don't think Google even does that!
Ratings come from users on AOL Local and the maps and results come quick. Of course, this type of local search would be great on Yelp!