A deluge of important news in the local social space this morning, all very relevant from a local strategy point of view.

  1. Yesterday afternoon, PaidContent detailed AOL’s, Yahoo’s and MSN’s aggressive plans for local. All three are attracted by potential local advertising revenues. The article says “Microsoft could integrate content from local bloggers”. As for Yahoo!, they recently “rolled out a new service called “Neighbors,” which lets users ask others in their neighborhood questions”.
  2. In this interview with Stephan Uhrenbacher, Qype’s founder, he reveals the site now has 17.7m monthly unique visitors. He also says that in Germany, Qype is ” larger than the yellow pages in terms of traffic”. From reading between the lines, Qype is thinking about implementing a game mechanism (or reward system) and a check-in system à la Foursquare, two features I recommended in my “perfect local media company in 2014” presentation.
  3. Google just shipped QR code stickers to the 190,000 most popular Google local US businesses. A QR code can be scanned/photographed by a camera phone and links to the Google profile page in Google Maps when activated. The Techcrunch article adds “Local businesses can also set up coupon offers through their Google directory page, which would turn the QR code into a mobile coupon”. Mobile + QR code + coupons = monetization strategy for the real-time Web. Another important data point: “There are now over a million local businesses which have claimed their Google local listing”. Does Google need the Yellow Pages sales forces anymore?
  4. Citysearch partners with Twitter to offer tools to small businesses. Citysearch will display “tweets” on merchant pages, offer the opportunity to merchants to create their Twitter account and offer a reputation management service. A Gigaom article says “Citysearch says it has direct relationships with some 200,000 local merchants”. These things will all be required features of any local search site within a few months.
  5. Techcrunch reveals this morning that Aardvark, the social Question & Answer service, is considering an $30M+ acquisition offer from Google. The service allows people to ask questions to their friends and to the network using instant messenging and social networks.

What it means: expect these kind of partnerships, acquisitions and features deployment to speed up as industry players try to capture market share of the real-time local/social Web. Expect Facebook to make a lot of noise as well in the next few weeks (the aforementioned Gigaom article asks “who wants to take bets on how many hours till Facebook Local launches?”). They are the 900-pound gorilla. In 12 months, we will already have a good idea who will win and who will lose in that space.

I don’t want to sound like an informercial but my company Praized Media foresaw the rise of social Q&A services like Aardvark and that’s why we introduced our Answers module (currently used by Yellow Pages Group) which enables consumers to ask local questions to their network of friends. Based on market evolution, we’re also developing a white-label reputation management service that will enable social media monitoring and small merchant Twitter sign-ups (like what Citysearch is doing) because we believe it’s going to be needed in every local media company in the future. Our real-time search module also allows any media publisher to display related “tweets” on merchant profile pages. And we’re also preparing an eCouponing module to monetize all that real-time activity. We’re basically building the whole social media toolkit for local media publishers. End of infomercial. :-)

Man Versus Machine

June 3, 2008

On Saturday, I realized that my old wireless router had died of old age. Not knowing what model to buy next (I had bought the first one because it was the only one compatible with my old iPAQ Music Center), I turned to my social graph for an answer. I used Twitter to ask my 375 “followers”: “just realized my wireless router at home died. Any advice as to purchase of a new one?”

In a matter of a few hours, I quickly received many valid answers both from Twitter and from Facebook where my “tweets” are broadcasted to my 612 “friends”:

  • A Montreal web entrepreneur told me to buy the Linksys WRT160N with a link to the product page
  • The partner at the VC firm who funded Praized Media said I should buy an Airport Extreme if I’m using a Mac
  • A former Ubisoft colleague told me to make sure I update the firmware before declaring my router dead
  • Another former Ubisoft colleague suggested a SonicWall router along with a link
  • A high school friend told me to buy Linksys and said I shouldn’t pay more than $80.00

Now, I could have easily queried Google for such a search. I could have looked for “how to buy a wireless router“, found relevant web sites like About.com or eHow, and identify important product criteria that way (and associated brand/models). But you know what? Research takes time. Pinging my social graph took me 1 minute and I got five valid answers in a very short time.

It got me thinking about how the social graph is structured, in terms of ease of access. It’s very easy to access friends & family. You usually have their e-mail address and phone numbers handy. It’s a bit harder to reach the people that have a shared interest with you (community members, neighbors, former colleagues, etc.) and it’s usually very difficult to directly ask experts for their opinion (have you tried pinging a movie critic lately?). What if you could easily reach all these people to ask them anything? And what if everyone had tools to make it easy to answer?

social graph word of mouth

It also got me thinking about the whole Man vs. Machine debate. Who do you trust most for information/recommendations? Man (a real human being answering your query) or Machine (an algorithm that’s surfacing relevant information)? It’s Facebook/Twitter/Friendfeed/Mahalo vs. Google/Yahoo/MSN. Coming from the business directory industry where word-of-mouth is often considered the biggest “competitor” (with social media, it’s becoming the biggest opportunity!), I tend to find human recommendations more relevant and more interesting.

In an article about social media monetization yesterday, eMarketer says that word-of-mouth might be a key way to monetize social media as “62% of marketing professionals told TNS Media Intelligence and Cymfony that creating word-of-mouth or viral campaigns has great potential to impact their business.”

That Man/Machine debate is age-old as you can see from this quote from a 1968 Time magazine article: “With the Depression, the machines that had once seemed so heroic to the prosperous ’20s were suddenly transformed into villains. As production lines slowed to a crawl and millions were thrown out of work, surrealists depicted nightmarish phantom treadmills and airplanes that were trapped like dragonflies.”

As we get closer to the singularity (defined as “a hypothesised point in the future variously characterized by the technological creation of self-improving intelligence, unprecedentedly rapid technological progress, or some combination of the two.”), I think we’ll get into more debates around the value of Man versus Machine (or maybe I’ve been watching too much Battlestar Galactica).

Update: Danny Sullivan talks about “Search 4.0: putting humans back in search“.

ReachLocal logo

I’ve heard from a well-informed source that ReachLocal is opening a sales office in Toronto, to better serve the Canadian market. I was able to confirm it when I found these employment ads. Steven Woods, senior recruter at ReachLocal, posted the ads. ReachLocal is a well-funded local search engine marketing firm. According to the Kelsey Group blog, their latest funding round ($55M in October 2007) will be used “to continue the company’s rapid expansion both in the U.S. and overseas, and for technology. In the past 12 months alone, ReachLocal has opened 11 sales offices in the top 10 DMAs. It expects to open a top-down DMA rollout in one market per month throughout 2008 and 2009. The company now claims to have “several hundred ad sales reps.” It sells for most of the local portal and sales engine leaders, including Yahoo!, Google, MSN, AOL and Superpages.com.”

Pat Marshall has been in the online directory industry basically since it was created. In fact, when introducing him, John Kelsey and Charles Laughlin (both from the Kelsey Group) called him “the father of Internet Yellow Pages”. According to the press release announcing his Yellow Book nomination, ” Marshall has spent more than 28 years in marketing leadership positions, including as a senior executive with Verizon, Frontier Corporation and R. H. Donnelley. At Verizon, Marshall led the launch and management of SuperPages.com.” So, it was with great pleasure I sat down to listen to this conversation between the Kelsey Group folks and Pat Marshall.

Q: Why did you get back into the Internet yellow pages (IYP) business?

A: I did not want to get back in IYP, I wanted to get back into local search. I also wanted to get back into action (as opposed to the consulting I had been doing in the last few years)

Q: So, is Yellow Book in the local search business?

A: Today we’re more IYP than local search, but the trajectory is going towards local search. IYPs are really good at finding who but not good at finding what.

Q: What are the areas you need to move into to to go into local search?

A: Three things: 1) Infrastructure. Business directories are yearly things and this does not work in the local search world. 2) Traffic. a key directory publisher axiom: advertisers advertise because users use. You need a qualified audience and we’ve done well with that (see this Comscore release). 3) Having inventory. Present a merchant in a context that’s appropriate for him. We don’t have enough inventory today.

Q: Where are you now on a scale of 1 to 5?

A: We’re at 3. We’ve made a lot of progress but I would like to move at twice the current speed. As a senior executive, I need to create the environment where that can happen. We need to focus on the collective IQ.

Q: What are you doing to develop a local search solution supported by research?

A: When people are using local search, they’re not shopping. They’re hiring. You don’t shop for a pool service, a lawyer. You hire these people. The process is three dimensional: urgency, risk, satisfaction.

Q: Let’s talk about verticals. Would the IYP product be further ahead if verticals had been developed earlier and deeper?

A: I don’t think we would have been better off. The industry has gone through enormous changes to get to 2008. In 1995, sales forces were unidimensional. The first year of Superpages.com, we generated $100K in revenues. We missed our target and it was the first time in my life I missed my target. Sales was afraid to bring Internet in conversations because they were afraid merchants would know more than them.

Q: Where is the value in Yellow Book’s online offers? Is it search engine marketing, is it YellowBook.com?

A: It really depends what the customer wants. In some situation, they only want what we called “Googlecaine”. So, you should sell what people are buying.

Q: What kind of partnerships are you looking for?

A: Anyone that can help me solve my three problems listed above. 1) Infrastructure products/services that reduce our costs (but bring a business case), 2) traffic (we’re always interested but talk about the quality of the traffic and how it fits with us), and 3) advertising/inventory products (talk to us about why it’s good for our customers, what skin are you willing to put in the game).

Q: Is it important for Yellow Book that Google, Yahoo!, MSN be successful in local search?

A: Yes, definitely. I doubt that they will invest into a local channel. So, they will come to us to resell their products.

Scott Karp from the Publishing 2.0 blog lists five arguments explaining why mobile is not yet very exciting:

1. Wireless carrier networks are SLOW
2. Public WiFi access is a SCAM
3. Sites aren’t formated for small screens
4. Mobile device screens are too small
5. Advertising gets in the way

What it means: I agree with his assessment, especially in North America. I’ve often been asked by traditional media publishers: “How do we leapfrog Google, Yahoo, MSN?”. I think one of the potential answers is Mobile. I’ve never been really excited by mobile’s potential until I attended the Web 2.0 Expo last April. I got the feeling when I was there that mobile is about to become real. Something in the zeitgeist, about the convergence of the various interests of hardware manufacturers, content publishers and the technological community. I think we’re still 24 months away from tangible results but, if you operate a local media business, you should be thinking hard about mobile today. You should have a couple of dedicated resources working on the mobile strategic plan, thinking about user experience specifically adapted for mobile browsing and the 3-inch screen, thinking about what kind of ads will be most efficient in that medium. Send that team to Japan or South Korea to see what people are doing with their mobile devices there. Invest some dollars now. Mobile is all about local and you can’t afford to miss that wave.

Update (& related topic): my friend Colin talks about overpriced mobile data plans in Canada

TechCrunch reports on a secret meeting that happened at Google in the last few days. It looks like Google is about to “out open” Facebook by allowing developers to leverage Google’s social graph information.

The short version: Google will announce a new set of APIs on November 5 that will allow developers to leverage Google’s social graph data. They’ll start with Orkut and iGoogle (Google’s personalized home page), and expand from there to include Gmail, Google Talk and other Google services over time.

On November 5 we’ll likely see third party iGoogle gadgets that leverage Orkut’s social graph information – the most basic implementation of what Google is planning. From there we may see a lot more – such as the ability to pull Orkut data outside of Google and into third party applications via the APIs. And Google is also considering allowing third parties to join the party at the other end of the platform – meaning other social networks (think Bebo, Friendster, Twitter, Digg and thousands of others) to give access to their user data to developers through those same APIs.

And that is a potentially killer strategy. Facebook has a platform to allow third parties to build applications on Facebook itself. But what Google may be planning is significantly more open – allowing third parties to both push and pull data, into and out of Google and non-Google applications.

That big rumor comes on the heels of another big announcement from Six Apart about open sourcing the Web’s social graph (a la OpenID). If you thought the Web was fragmented, wait until you can start building application on top of Google, Yahoo or MSN’s social graphs…

(via Hitwise)

YouTube‘s growth has not begun to slow yet this year. Hitwise traffic data shows that the market share of US visits to YouTube has increased by 70% when comparing January 2007 to May 2007 (this only includes site visits, not streams or streams from views on embedded videos). In comparison, the market share of visits to a custom category of 64 other video sites increased by only 8% in that period. As of May 2007, YouTube’s market share was 50% greater than those 64 sites combined. Here is a ranking of the top 10 sites in that custom category for May 2007:

Top 10 video sites May 2007 Hitwise

What it means: YouTube still completely dominates the video market online. As video sites are quite bandwidth intensive and the video ad business model is not quite “ready for prime time” yet, we’ll start seeing some attrition in the marketplace in the next few months within the 64 video sites counted by Hitwise. Expect verticalization and B2B-ization of some of these players. Some of them might close as they run out of VC money.

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