2010's Most Important Events in Local/Social

Like last year, Mike Blumenthal asked me for my thoughts on what were the most important events in “local” in 2010. I obliged and Mike put together a blog post with my answers. In a nutshell, they are:

  1. The launch of Twitter Places
  2. Foursquare’s growth
  3. Facebook launches Places
  4. The launch of the iPad
  5. The rise of Groupon and the explosion of the daily offers space
  6. Groupon rejects Google’s purchase offer

Head up to Mike’s blog to read the rest of my post.

Advertisements

John Battelle: Small Businesses are Driven by Local, Social, and Real-Time

Late on Friday, John Battelle wrote a long post about Groupon and what’s driving its success. As always, when Battelle writes about local media, he hits it on the nail. The following is also very enlightening as he talks about small business owners:

First, small business owners (SBOs) care deeply about location. Are they in a good location? Will customers be able to find them? Is there parking? A good neighborhood? Strong foot traffic? Second, SBOs care deeply about relationships and word of mouth or what we will call social. Do people refer their friends and family to the business? Are people happy with the service? Will they say nice things? Third, SBOs care very much about timing what I call “real time” in my MOLRS breakdown. What are the best hours for foot traffic? What are the best times to run promotions? How can I bring in more business during slow times? How does seasonality effect my business? When should I have a sale? In short, SBOs are driven by local, social, and real time.

What it means: Battelle could have mentioned the temporal Web instead of real-time and he would have written about all my current favorite topics (I recently published a presentation about the potential of the temporal Web). I think these three elements bring about structural changes in the way we do local business. Make sure you have incorporated these in any local media strategic plan.

With our Needium customers, we’re finding the exact same thing. Small and medium-sized businesses definitely care about local (no-brainer), social (word-of-mouth, followers/fans, loyalty, conversations) and real-time (meeting customer’s needs when they have them, answering questions).

After Groupon, What's Next for Google?

Unless you’ve been living on a deserted island in the last 10 days, you’ve heard about the presumed $6 billion Google bid to buy Groupon, the leading daily offers player. Groupon walked away from the opportunity on Friday and will probably do an IPO in the next12-18 months (like Facebook). I gave a couple of media interviews last week on the phenomenon, one in the Montreal Gazette (here and here) and the other one in La Presse (in French), but I didn’t have the chance to blog about the story yet. Let’s fix that.

Why did Google want to buy Groupon and at such a huge valuation? For a couple of reasons.

1) Google wants to make sure they’re not seen as one-trick poney by Wall Street. Because they’re a public company, they need to show huge growth to meet expectations and expand into many ad vehicles. At their last quarterly call, they highlighted the success of their display ads business. Groupon is rumoured to have annual revenues of $2 billion and it certainly would have added interesting top-line revenues and great growth rates. Not sure Google would have liked the lower margins than what they have in search advertising, but it is what it is.

2) Google wanted to buy a local sales force. Groupon is present in more than 300 metropolitan markets and 35 countries and they’ve used their capital to scale the sales team and acquire regional players in Europe and Asia. Google has signaled many times in the past couple of years that they haven’t been satisfied with their large volume local sales channel partners (read Yellow Pages) and they’re probably wondering about having their own local sales force. Over the years, many rumors have surfaced about Google buying Yell and other large directory publishers. With the Groupon acquisition off, directory publishers stock has risen in value. According to The Street, “Three small-cap companies soared on Friday. Dex One Corporation ended nearly 49 percent higher, boosting its market cap to $335 million. It owns Yellow Pages and White pages directories. Meanwhile Supermedia, which pushes Superyellowpages.com and other local ads, soared 20 percent on a huge spike in volume. Its market cap is still just around $105 million. And Local.com, a business search engine and ad network, added 8.3 percent with a $90 million market cap.”

Both Supermedia and Dex One still have huge debts pushing the total cost of an acquisition higher (probably $3 billion +). Interestingly enough, Greg Sterling reported yesterday that Yell was thinking of selling Yellowbook, their US arm. Good timing!

Could a transaction to buy a directory publisher happen? Yes, it’s possible but I wouldn’t say it’s probable. There’s probably an underlying culture clash issue, trying to match Google with a Yellow Pages company. Google will probably be tempted to look at other options before including building their own sales force. After all, if Groupon did it, Google has all the capital it needs to create their own. It might take 12-24 months, but it would probably cost less than $3 to $6B required to make an acquisition. Could they look at ReachLocal? They had 641 salespeople as of Q2 2010 and a much smaller market cap / debt (under $1B). Maybe. One thing is sure. Google will make a strategic move in that field in the coming months.

Yahoo Looking to Acquire Groupon?

The latest rumor in Silicon Valley:

It’s no secret in Silicon Valley dealmaking circles that Yahoo has been looking at what insiders have called a “transformative” acquisition to jumpstart the company.

And while many think that has to mean grabbing one of the big content companies–such as AOL or Demand Media–right in Yahoo’s wheelhouse, sources said it is actually training its attention on, drum roll, commerce.

That would be local commerce, most specifically, companies such the hot start-up Groupon, which dominates social couponing.

Sources said Yahoo (YHOO) has been eyeing it for possible acquisition, which would put it smack dab in the hot space around local purchasing and consumer information.

via Yahoo’s M&A Strategy–Maybe Local Commerce Rather Than Content (Hello, Groupon!) | Kara Swisher | BoomTown | AllThingsD.

What it means: not surprising that people are sniffing around Groupon. Their success has been phenomenal.  Yahoo! has always been a fan of “local”, so no surprise there but I’m not sure Yahoo! would make a good deal (no pun intended!) buying Groupon though. Their valuation is through the roof and they’ve already started to expand in Europe (and I don’t think Yahoo! is trying to build up that continent). I suspect Yahoo! must also be looking at LivingSocial, the #2 player in the space, and will probably end up buying them.

Is Group Buying a Fad or a Revolutionary New Local Advertising Vehicle?

Such was the title of the presentation I did this morning to a great crowd at the most recent Montreal’s Social Media Breakfast. In the document you’ll find on Slideshare, I explore what is group buying, its benefits/downsides, its origin, the Montreal competitive landscape (8 players) and thoughts about where the phenomenon is going.

Some of the content of my presentation was inspired by a great webcast titled ” Local Social Commerce: The Explosion of Group Buying” and starring Greg Sterling (Screenwerk), Perry Evans (Close.ly) and James Moran (Yipit). You can see James Moran’s slides on the Yipit blog, a must-read if you’re interested in the space.

Picture source: Heelatch

Update: Adele McAlear presented right before me this morning. Her topic was “Turbocharge Twitter with Apps”. Check out her very detailed presentation here.