Canpages Acquires Social Recommendation Site GigPark.com, Validates Praized's Model

[praized subtype=”small” pid=”58d245fd7e8f20800dee0ecd3af21f08″ type=”badge” dynamic=”true”], the second-largest directory publisher in Canada, announced Sunday night the acquisition of GigPark, a self-funded social recommendation site from Toronto, Canada. For Canpages, it’s the second local/social acquisition in two months. The first was Ziplocal in June. This acquisition is the latest in a series of “local media” technology/people acquisitions in the last few months. I noted five other ones in a blog post I wrote two weeks ago.

Interestingly enough, this is the kind of white-label enterprise technology Praized Media is proposing to directory publishers and other local media publishers worldwide. Yellow Pages Group, Canada’s largest directory publisher, is using our Answers module at answers.yellowpages.ca. We’re also currently deploying our real-time activity stream and real-time search technology within a major local portal and our technology stack has generated interest from about a dozen players in Canada, in the US and in Europe. Because of that, as co-founder of Praized Media, I was asked by a few people yesterday what I thought of this acquisition.

1) I am very happy for Pema Hegan and Noah Godfrey for this acquisition. Good work guys! I know how much work goes into building a startup. You’ll see, it’s actually fun working in the directory industry!

2) As a crystal-ball gazer, I am delighted to see directory companies fully embracing social media, even though it’s not our technology they end up using. As I’ve been writing about in the last three years, social media is key to the future of traditional local media firms. The “social” trend in the directory space is not a fad.

3) Reviews and recommendations are just the tip of the iceberg in social/local. The next evolution is “real-time”. Google is thinking about it, Twitter announced last week that they would support geo-location in their API which will allow developers to add latitude and longitude to any tweet and Facebook is bound to announce something very soon.

4) The acquisition of technology assets & people by local media publishers validate our core business model of working as technology providers to local media publishers. There is a clear need out there for our product offer and the Praized team is a world-class product & development team in the local/social technology space.

So, what to expect in the next 6 to 12 months?

1) Definitely expect more acquisitions and possibly some mergers. As Kelsey Group analyst Matt Booth said last week during a Kelsey webinar, local media publishers should try to put their hands on interesting companies and assets this year before the economy picks up again next year. The idea is to be ready with new, groundbreaking revenue-generating opportunities when good times come rolling again.

2) Also expect more rapid innovation in the space. Robert Scoble is quickly cluing in to the business potential of local recommendations in a post yesterday where he compared Facebook, Google, Twitter and Yelp. He says:

How will Facebook collect the cash? Well, go to Google and let’s do that sushi search for Boulder, Colorado again. Did you see how that list works? Facebook needs that list. Twitter isn’t even close. But what’s missing? PEOPLE! Imagine if this list, when it’s brought to you by Facebook, shows that #1 has been liked by 14 of your friends? Businesses get that for free. But what don’t they get for free? Yelp’s “offers.” Businesses PAY to “offer” things to customers to try to move up the list. So, if you’re the #3 business on the list, you might say “bring your iPhone in and you’ll get free beer.” Doing that will cost you money, both in the free beer and the advertising you’ll pay Facebook or Google or Yelp to try to move up the list. Google has the list. It doesn’t have the humans or the offers. Yelp has the offers but doesn’t have hundreds of millions of people. Facebook has hundreds of millions of people and the “like” system, but not the offers. So, who will get there first? Now you understand the battlefield. Who will win the war?

But he forgets that Yelp’s “offers” don’t scale. Yelp doesn’t have the “offers”. They don’t have a large enough sales force to make it a billion dollar business. It’s Yellow Pages, newspapers, coupon and other local media publishers that own the sales force. But then, like Google, local media publishers don’t have the social elements and interactions. It will be a natural one-two punch for any large company that assembles merchants (i.e. advertising) and consumers meshed in social interaction. I’m willing to bet this will come from directory companies if they move fast enough but I venture the window of opportunity is approximately 12 months before Facebook, Twitter or even Google crack the social local nut.

Update: Greg Sterling analyzes the transaction.

Canpages Acquires Social Recommendation Site GigPark.com, Validates Praized's Model

[praized subtype=”small” pid=”58d245fd7e8f20800dee0ecd3af21f08″ type=”badge” dynamic=”true”], the second-largest directory publisher in Canada, announced Sunday night the acquisition of GigPark, a self-funded social recommendation site from Toronto, Canada. For Canpages, it’s the second local/social acquisition in two months. The first was Ziplocal in June. This acquisition is the latest in a series of “local media” technology/people acquisitions in the last few months. I noted five other ones in a blog post I wrote two weeks ago.

Interestingly enough, this is the kind of white-label enterprise technology Praized Media is proposing to directory publishers and other local media publishers worldwide. Yellow Pages Group, Canada’s largest directory publisher, is using our Answers module at answers.yellowpages.ca. We’re also currently deploying our real-time activity stream and real-time search technology within a major local portal and our technology stack has generated interest from about a dozen players in Canada, in the US and in Europe. Because of that, as co-founder of Praized Media, I was asked by a few people yesterday what I thought of this acquisition.

1) I am very happy for Pema Hegan and Noah Godfrey for this acquisition. Good work guys! I know how much work goes into building a startup. You’ll see, it’s actually fun working in the directory industry!

2) As a crystal-ball gazer, I am delighted to see directory companies fully embracing social media, even though it’s not our technology they end up using. As I’ve been writing about in the last three years, social media is key to the future of traditional local media firms. The “social” trend in the directory space is not a fad.

3) Reviews and recommendations are just the tip of the iceberg in social/local. The next evolution is “real-time”. Google is thinking about it, Twitter announced last week that they would support geo-location in their API which will allow developers to add latitude and longitude to any tweet and Facebook is bound to announce something very soon.

4) The acquisition of technology assets & people by local media publishers validate our core business model of working as technology providers to local media publishers. There is a clear need out there for our product offer and the Praized team is a world-class product & development team in the local/social technology space.

So, what to expect in the next 6 to 12 months?

1) Definitely expect more acquisitions and possibly some mergers. As Kelsey Group analyst Matt Booth said last week during a Kelsey webinar, local media publishers should try to put their hands on interesting companies and assets this year before the economy picks up again next year. The idea is to be ready with new, groundbreaking revenue-generating opportunities when good times come rolling again.

2) Also expect more rapid innovation in the space. Robert Scoble is quickly cluing in to the business potential of local recommendations in a post yesterday where he compared Facebook, Google, Twitter and Yelp. He says:

How will Facebook collect the cash? Well, go to Google and let’s do that sushi search for Boulder, Colorado again. Did you see how that list works? Facebook needs that list. Twitter isn’t even close. But what’s missing? PEOPLE! Imagine if this list, when it’s brought to you by Facebook, shows that #1 has been liked by 14 of your friends? Businesses get that for free. But what don’t they get for free? Yelp’s “offers.” Businesses PAY to “offer” things to customers to try to move up the list. So, if you’re the #3 business on the list, you might say “bring your iPhone in and you’ll get free beer.” Doing that will cost you money, both in the free beer and the advertising you’ll pay Facebook or Google or Yelp to try to move up the list. Google has the list. It doesn’t have the humans or the offers. Yelp has the offers but doesn’t have hundreds of millions of people. Facebook has hundreds of millions of people and the “like” system, but not the offers. So, who will get there first? Now you understand the battlefield. Who will win the war?

But he forgets that Yelp’s “offers” don’t scale. Yelp doesn’t have the “offers”. They don’t have a large enough sales force to make it a billion dollar business. It’s Yellow Pages, newspapers, coupon and other local media publishers that own the sales force. But then, like Google, local media publishers don’t have the social elements and interactions. It will be a natural one-two punch for any large company that assembles merchants (i.e. advertising) and consumers meshed in social interaction. I’m willing to bet this will come from directory companies if they move fast enough but I venture the window of opportunity is approximately 12 months before Facebook, Twitter or even Google crack the social local nut.

Update: Greg Sterling analyzes the transaction.

Why Social Media is Not Just About Merchant Reviews

Merchant review functionalities and sites are all the rage currently in the Yellow Pages industry. In the last 2 months, amongst others, we have seen:

  1. Truvo launch their own social site under the Truvo.com URL
  2. Eniro launch a beta social site under the Rejta.se URL
  3. AT&T Interactive announce the launch later this year of a social Yellow Pages site under a different brand than YellowPages.com
  4. Herold, the Austrian directory publisher, make an investment in Tupalo, a Yelp-like destination site.
  5. Canpages, the independent Canadian directory publisher, acquire assets from ZipLocal, a Canadian merchant review site.

Often called Social Yellow Pages sites, the biggest representatives of that category are Yelp (US, UK, Canada) and Qype (most of Western Europe). Both are independent, venture-funded companies. As of June 2009, more than 22 million people had visited Yelp in the past 30 days according to published internal numbers. Yelp users had written over 6 million local reviews. Qype had 9M+ unique users in May 2009 (+350% in 12 months) and 1M+ reviews.

Impressive usage numbers but an important challenge remains for these sites: monetization. For example, even though Yelp has been extremely successful from a user point of view, revenues are still low in proportion. Articles from 16 months ago mentioned Yelp’s revenues were “rumored to be sub $10 million/year” (I discussed Yelp’s monetization strategy here.)

On the other side, directory publishers, even though they’ve had for the longest-time advertiser-focused web sites, have been extremely good at generating revenues out of their web sites. For example, Yellow Pages Group (Canada) generated $C 247 million in online revenues in 2008. Over the same period, Pages Jaunes Groupe (France) achieved 471 million euros in online revenues. In the US, Yellowbook’s online revenues were up a spectacular 97.5% to $US 227 million in the last fiscal year.

Why is that? Yes, we could obviously underline the fact that these publishers represent trusted media brands, that they have large sales forces and that regular merchant contacts all play a big role in their financial success. But I would posit the moment in the consumer purchase decision process when online directories are used plays a bigger role in monetization potential.  Looking at the traditional decision process (see diagram below), online directories are clearly used when consumers are doing information search and evaluation of alternatives. Consumer reviews only happen at the end of the whole decision process, at post-purchase evaluation. Consumers will obviously look at past reviews as a proxy when doing information search but I don’t think it’s as attractive a real estate for advertisers.

buying_decision_process

Figure: Consumer Purchase Decision Process (source: Tutor2U)

I’m definitely not saying consumer reviews are useless from a strategic point of view. Consumers love to provide feedback and they love to read comments on merchants to make up their mind. I’m saying directory publishers should see reviews as one of the elements on which they build their social media strategy and one that happens at the end of the purchase cycle. It should be integrated within a more complete social media consumer purchase decision process strategy.

The filter of the consumer purchase decision process is very powerful to see who’s competing against you and to identify opportunities. Google, for instance, is clearly used by consumers when they do information search and comparing alternatives. This explains why the search giant from Mountain View is perceived as a serious threat by most directory publishers.

Enter Twitter and Facebook, the new juggernauts of the real-time conversation and real-time search world. Where do they fit in that purchase decision process? They’re definitely used for information search as well. If you search on Twitter for “Can anyone recommend” or “Looking for“, you’ll see that, every day on Twitter, thousands of people are asking for recommendations and advice. That’s why, by the way, we implemented a social media broadcast mechanism in our Praized-powered Local Answers module (used here by Yellow Pages Group in Canada) to send consumer requests to Twitter and Facebook. But I think what’s even more powerful with this new real-time conversation world is the fact that people are now actually expressing needs to the world. More than 100 people per day on Twitter say:

All these consumers are facing major life events (or know someone that are facing one) and are amazing advertiser leads for any publishers that can corral them. Consumers now want to express their needs/problems and have people/companies come to them with solutions. As I expressed in my “I have seen the future of local media” blog post, this is a new and important consumer behavior online. That’s why I believe every local media publisher will be introducing locally-relevant real-time conversation and real-time search tools within their Web sites in the next three years. That’s why I believe social media lead generation, customer and reputation management tools will become more prevalent in the next few years. That’s why publishers will introduce social ratings/reviews functionality to allow consumers to close the purchase loop after expressing needs and shopping for options. But be aware that Twitter and Facebook will certainly go after this market. This is probably the biggest opportunity directory publishers have seen since the arrival of the world wide web but it needs to be a complete strategy. Merchant reviews alone do not make a social strategy.

RHD Releases DexKnows iPhone App

I’m a bit late writing about this news (Greg Sterling wrote about it here and the Kelsey Group guys here) but RHD has just released a series of DexKnows mobile apps & services.  I recently had the opportunity to connect with Deborah Eldred, Director of Mobile at RHD, to discuss the new offer.

dexknows-mobile-apps

Highlights:

  • Developed by MobilePeople
  • Covers the whole mobile “value chain”: text messages, mobile browser version, downloadable client applications, iPhone application
  • They looked at ComScore data to focus development on the most important phone models/carriers
  • They developed a specific search “taxonomy” by looking at top categories in a mobile context. They also regrouped categories in three most-used metacategories called Gettin’ Grub (food & restaurants), Havin’ Fun (entertainment), Goin’ Places (travel)
  • Search results are ranked by centroid, currently the center of the city, but eventually the user geo-location

I asked Deborah how the Dexknows offer was differentiated from other offers out there. She mentioned the following:

  • Focused on relevant experience for mobile users (as opposed to advertiser-focused)
  • Most important mobile categories have been grouped and surfaced on the home page
  • People search (data provided by Whitepages.com)
  • RHD covers the whole mobile value chain, from text messages to iPhone app
  • They have great content in their in-region territory.

You can go to m.dexknows.com to use/download the various versions and a short video shows the various features.

Update: Yellow Pages Group in Canada has also released applications for the iPhone and Blackberry. Canpages had released an iPhone app about two weeks ago.

What it means: happy to see that directory publishers are releasing new mobile apps. Obviously, in the medium/long term, it is a critical component of the distribution mix. But I think, in the short term, it plays an important perceptual role with the sales team and advertisers.

CanPages.ca Introduces Its Own Street View Feature

According to CTV’s Chris Abel, CanPages.ca, the local search site of [praized subtype=”small” pid=”58d245fd7e8f20800dee0ecd3af21f08″ type=”badge” dynamic=”true”], the independent Canadian directory publisher, has launched its own Street View feature. CanPages has partnered with San Francisco-based MapJack to deploy this technology in Canada.  Abel says it’s very similar to Google Street View but includes new features such as “a fullscreen mode and paths that explore pedestrian walkways as much as they do the streets ruled by cars and trucks.”

You can see it in searches in Vancouver, Whistler, or Squamish (all in British Columbia). As for future expansion, “the company plans to expand to include Street Views of Toronto and Montreal next, followed by as much of Canada as possible.”

Vancouver Street View Canpages

In the last few days, an ad for a video camera operator has appeared in a Quebec job site, making people think Google was going to capture Quebec City in Street View. It’s possible but I suspect it might be an ad for the first French Canadian street view deployment of CanPages.ca.

What it means: looking at the introduction of new features inside the CanPages.ca site in the last 6-12 months, it’s clear that the exec team there has identified feature gaps inside YellowPages.ca, the main property of Yellow Pages Group (and directory incumbent in Canada) and are trying to differentiate themselves via those new features. It’s a good strategic move. On the other side, YPG has a mapping agreement with Microsoft and I’m fairly certain the Redmond giant is also taking street view pictures (many people on Twitter have reported seeing the Microsoft vehicle taking pictures). This will certainly be easy for YPG to deploy once it’s available in Canada. As I reported a few weeks ago, the new DexKnows.com has a nice integration of Google Maps and Street View.

Yellow Pages Group to Introduce Print Opt-Out Mechanism

Yellow Pages Group, Canada’s biggest directory publisher, will introduce an opt-out mechanism for their print business directory in 2009. Quoted in this morning’s Metro newspaper, Annie Marsolais, Director of Communications at Yellow Pages Group, said they would launch the initiative “since some people have expressed the desire to stop receiving our directory” (translated from French). Details will be made available in the next few months. Opt-out mechanisms allow consumers to remove their address from print directory distributions.

Michael Olde­we­ning, Director of Marketing at Canpages, the second largest directory publisher in Canada, was also interviewed for the same article. He mentioned that people who didn’t want to receive their directory could always call them “but they did not receive many calls to that effect”

Finally, Jean-Pierre Gosselin, General Manager – Marketing at Mediapages, a recent player in the directory space backed by the powerful Quebecor Media empire, explained that “they were thinking of a strategy to bring back unwanted directories in the multiple Quebecor Media offices and stores”.

Olivier Vincent, Canpages' CEO, Loses Bet, Gets His Hair Shaved

Olivier Vincent, CEO of [praized subtype=”small” pid=”58d245fd7e8f20800dee0ecd3af21f08″ type=”badge” dynamic=”true”], a Canadian independent directory publisher, took a bet with his staff that he would shave his head if Canpages.ca reached 1M unique visitors or more in May 2008.

He seems to have lost…

Olivier Vincent Canpages Shaved Head Hair

You can see the results here (short version) and here (long version) on YouTube.

Source: press release