Matt McGee at SEL writes and wonders aloud about how the Microsoft-Yahoo! deal will impact local. It’s a good article.

Notwithstanding the deal, Yahoo! told me that it’s still very much committed to the local market.
Matt McGee at SEL writes and wonders aloud about how the Microsoft-Yahoo! deal will impact local. It’s a good article.

Notwithstanding the deal, Yahoo! told me that it’s still very much committed to the local market.
Local.com Q2 results came out yesterday: “the company expects revenue to be between $13.4 and $13.7 million, exceeding the high end of its prior guidance of $13.2 million.”
Here’s are more non-financial details that went out with the release (verbatim):
Yesterday Yahoo! announced an upgrade to the local Shortcut that enables greater discovery and interaction around local listings content in Yahoo! search results. Here’s an example search for a San Francisco restaurant, Salt House:

Each of the links at the bottom of the listing opens a window that provides more information: reviews, images, directions:


A couple of emails that I saw yesterday asked why are they bothering after the Micro-Hoo announcement? But this is precisely the kind of thing that Yahoo! is talking about when discussing innovation around the UI and user experience. Hopefully the Microsoft deal will free and embolden Yahoo! to experiment more and create more useful experiences/tools such as this.
There’s a question that remains in my mind about how much effort Yahoo! will put into Local (as in Yahoo! Local) going forward. It was the leading local property for quite some time until Yahoo! started losing people and the site was put on maintenance mode. An analogy might be: a great house that has has been neglected and needs some TLC.
As an aside, somewhat buried in the post, Yahoo! says “About 20 percent of online searches have a local intent.” I would again argue with this figure as too low but it’s significant because comScore’s number has been 12%-13% of search is local.
If you’re still hungry for coverage of the Microsoft-Yahoo! search deal you can read Danny Sullivan’s long and almost exhaustive Q&A style article on SEL. He touches on most questions and issues there. There’s also a roundup of other coverage in the piece. He humorously calls what Yahoo! will be doing now “search styling” — referring to the UX/UI makeover that Yahoo! will layer on top of the Bing index and organic/paid results.
The conventional wisdom (including from me) is now emerging that Microsoft got the better deal and that Yahoo! has sacrificed a strategic asset. But I was thinking last night, what if Yahoo! really executes well and is able to make this work as they’re publicly saying? What if the UI layer that Yahoo! puts on top of Bing really does make for a better experience than what Yahoo! Search is offering now?
Many months ago, I downloaded the Inquisitor browser plug in, acquired by Yahoo!, and used it for a time. It shows only Yahoo! search results. So as an experiment I tested it out for about a month and primarily used Yahoo! as my search engine:

While like many of the features of Yahoo! Search, in my experience using it as my primary engine, it wasn’t as good as Google — the results weren’t as complete or relevant. It was good but not as good. Comparable to the Android vs. iPhone experience.
This leads me to think that with a better underlying index maybe Yahoo! can really make good on the promise of all the UX and interface inititatives they’ve been talking about in search. Maybe they’ll truly be able to “innovate” around the search user experience and come up with some great features and capabilities. I’m hoping that’s true and that we will see more “innovation,” as promised yesterday by everyone.
The problem and pushback to this is that Yahoo! may lose more key people. One of the contributing reasons motivating a search deal with Microsoft is the fact that Yahoo! has already suffered a massive search brain drain with defections to Microsoft, Google and elsewhere. Yesterday CEO Carol Bartz said the following about Yahoo! Search employees in response to a question about layoffs and redundancy:
TIM WEBER (BBC): I’ve got a question, does it have any impact on jobs? Do you envisage that people working on search at Yahoo! move to Microsoft, work for Microsoft or will the Microsoft teams take care of all that and Yahoo! will then see redundancies in its teams?
CAROL BARTZ: I’ll take that one. There’s actually three variables here. Yes, there are certainly many Yahoo! search employees that will be asked to take jobs at Microsoft as they integrate the technology and combine the search market, and frankly run a very good search market. So, there will be that bucket of employees, if you will. There will also be search employees that we look to, to help us on the display side of our business, another aspect of globalizing our audience products in Yahoo! And then unfortunately there will be some redundancies in Yahoo!, so that’s the third bucket.
What I would remind you though is that this is a transition over the next two and a half years. So, virtually nothing will change for the first — well, until we get regulatory approval, which we hope is in early 2010. And then after that it’s on the outside 24 months for transition. Hopefully together we can do it faster, because we’re all anxious to get this going. But yes there will be redundancies; it just is in the future.
So if Yahoo! is really not going to fall completely into “also-ran” status in search, they’ll have to retain good people who can do the job and provide a differentiated experience from what exists at Google and Bing. If not, they’ll turn into AOL or Ask, companies that once had vibrant search efforts and essentially gave up, shifting into maintenance mode.
There’s helpful article out today from the NY Times directed at SMBs about how to manage their online reputations. Nothing new to people who work in this industry but useful for SMBs who may not know much about these things. The piece mixes anecdotal information from businesses with data and practical advice:
I’ve just posted a Q&A from an earlier discussion with Microsoft SVP Yusuf Mehdi and Yahoo EVP Hilary Schneider this morning. The search deal with Microsoft covers “web, image and video search.” Yahoo has the option to use its own technology or another third party technology in other areas, including Maps and Mobile. It can also use Microsoft’s.
It’s very likely however that use of Microsoft search technology will be broader than those three identified areas. What about maps/local? Should Yahoo simply scrap it’s maps and use Microsoft’s Virtual Earth for mapping instead?

This chart from Compete shows Google Maps at #1, followed very closely by MapQuest with Yahoo and Bing very far behind. Yahoo! was the original innovator in dynamic mapping and was the long-time leader in local until the company essentially stopped investing in those products. They’re still good but have more unrealized potential.
What do you think? What would you do if you where Yahoo! here? Keep investing in your own maps platform or use Microsoft’s?
IAC reported Q2 results, which are very mixed but improved from Q1. Here are excerpts that pertain to local:

Citysearch [part of Media & Advertising] launched its new technology platform and announced the addition of Yellowpages.com and Superpages.com to its Citygrid partner network. IAC now has approximately 5.5 million local smartphone apps downloaded in total.
ServiceMagic revenue benefited from a growing and more active service provider network and 5% growth in service requests driven, in part, by increased marketing efforts. Revenue benefited further from contributions from the businesses now comprising ServiceMagic International (acquired October 29, 2008) and Market Hardware (acquired January 23, 2009). Profits were adversely impacted by an increase in marketing expense per service request as well as a shift in the mix of service requests from higher margin discretionary home repair and improvement requests to lower margin requests which was due primarily to the general economic slowdown. Profit declines also reflect higher operating expenses primarily associated with the expansion of the sales force and losses related to ServiceMagic International and Market Hardware.
Separately, yesterday, ServiceMagic announced a deal with magazine publisher Meredith:
The arrangement pairs the Meredith Women’s Network – a Top 5 online female network of Web sites including well-known, home-related properties inspired by the Better Homes and Gardens brand such as BHG.com, DIYadvice.com, Kitchenbathideas.com and Remodelingcenter.com – with ServiceMagic.com’s network of prescreened local service professionals. Meredith’s premium sites, which draw 16 million unique visitors each month, will now feature a fully-integrated, customized find-a-pro tool powered by ServiceMagic.com. The free tool will allow consumers using Meredith Web sites to link directly to ServiceMagic.com’s database of top-rated local professionals.
The deal’s big winner is Microsoft, which makes no upfront cash payment and gets Yahoo!’s reach now for its advertisers. Yahoo! wasn’t compelled to do this deal but perhaps the board and the market pressure was too much.
Yahoo! gets some revenue guarantees, access to search data (for BT on other properties) and doesn’t have to invest many resources in search going forward. Longer term, however, this is probably not a good deal for Yahoo! but we’ll see.
Stock is down right now:

There are lots of open questions:
Your thoughts?
I know this is old news but I was in San Francisco and ran across this bus shelter ad and so I snapped a picture of it with my Palm Pre:

Here are some items I don’t have time to blog about in more detail:
TownMe’s Elad Gil asked me the question I always get asked and which I dread: What do you see out there in local that’s really interesting? After talking to TownMe I would add his site to the list.
A mix of data crawled from the Internet and user-generated content, Elad characterized TownMe as a kind of “next generation” wiki for local. The site describes its mission as follows: “TownMe’s mission is to bring all the world’s communities and local information online.”

TownMe has licensed one of the commercial databases and so has the directory listings and local search capabilities that one would expect, effectively “table stakes” in the local segment:


At first glance you might be tempted to dismiss this as another “me too” local directory or search site but there are some very interesting things going on here if you poke around and look more closely.
The site’s founders are pulling together volumes of data from lots of places online. For example, the site has built pages and tools on top of Census data, as well as from other sources, such as Twitter. Everyblock is really the only other site that is using public data like this.
Perhaps the most amusing of these tools is the “Yuppie locator,” which literally maps US Census data to neighborhoods:

There’s also general demographic and census data presented for every state and city in the US:

On a more “practical” level, TownMe has built helpful content pages that allow users to browse top lists by category. It has also created a considerable number of very specific pages and lists that will likely mirror search queries (“Best Indian in Mission, San Francisco“), with lots of SEO value:

The site isn’t perfect and the founders acknowledge that. What’s interesting is the potential breadth of TownMe and the mix of a wiki, user-generated content approach with data that are crawled and organized by the internal team. Right now monetization is through Google AdSense. Over time Gil, a former Google employee, says he has some interesting ideas about monetization that they will implement, though he was reluctant to discuss what those were.
Pigeonholing TownMe is not easy. It’s not exactly a local search engine, nor is it really a directory site. Not is it a local news and events site. It’s not American Towns or Topix, Zvents, Everyblock, Yelp or Yellowpages.com. Rather its an amalgam, in a way, of elements of all of them.
A Harris-LinkedIn survey (.pdf) of just over 1,000 US advertising “decision makers” released last week found that advertisers were migrating away from print and other traditional media — no surprise there — and adding more digital media to the mix.
The top-level findings:
Today vs. a year ago:

The chart above reflects that advertisers are using traditional media less often than a year ago. In addition, just over half (54%) of advertisers report that they use the Internet as part of a larger “integrated campaign with other media.”
Intentions behind use of online advertising:

Note the line “to drive information gathering for an offline transaction” as the chief use (65%) after “branding.” This is quite significant in my view and indicates that marketers do “get” how consumers use the Internet as a research tool before buying locally.
Consumer unhappiness with online ad units:
A parallel survey conducted by Harris asked consumers about their likes and dislikes re Internet ads (n=2,025 US adults):

Consumers tend to express more frustrations and dislike about digital advertising than traditional advertising. They also tend to trust digital advertising less than they trust traditional media ads.
A final note: the relatively large number of advertisers that say they’re using mobile advertising — “digital advertising, such as through cell phones” — causes me to question the survey results to some degree. Clearly more advertisers are moving budget to digital media and relying on traditional less, but the 39% who said they’re using mobile advertising is too high in my view to be extrapolated.
Before they were opened people scoffed at the potential of the Apple Store, saying that Gateway Computer had failed in retail and that Dell was the model for the computer industry — online, virtual stores, etc. Of course those dour prognosticators turned out to be wrong, didn’t they.
Apple’s stores are very successful and a central part of the resurgence Apple has enjoyed over the past few years. In fact I bought my latest laptop (a Macbook) specifically because of the stores rather than wait for a Dell or Lenovo to ship to me:
Honestly, had there been local stores where I could have purchased the Lenovo or Dell models I identified I probably would have bought one of them. But there weren’t so once again I’m a Mac user.
Now, as you know, Microsoft is going to open lots of stores — near Apple Stores — to showcase its products. Gadget blog Gizmodo seems to have obtained a PPT deck that shows the concept and some of the details of how the stores will be set up, complete with “Answer bar.”


Images: Gizmodo
John C. Dvorak (often curmudgeonly) believes this is a mistake for Microsoft. I would say, rather than outright mistake, it’s certainly a risk. Stores don’t automatically equal success; Sony Style stores are largely a failure for example. So opening stores doesn’t mean people will buy more of your stuff, although you get to control the context and environment in which it’s presented.
I once made a recommendation (several years ago) that Google open a “Google Store” (partly for the brand and partly to demo AdWords to local businesses). Nobody there took me up on it obviously.
What do you think? Do you think this new retail effort by Microsoft will pay off as it has for Apple or will it turn out to be a costly exercise in futility?
I had actually heard this was happening some time ago but I was reminded by this article in Crain’s New York business: Ambassador Media, publisher of Ambassador yellow pages is now in Chapter 11/bankruptcy:
The petition was filed Friday in United States Bankruptcy Court for the Southern District of New York.
The independent, private-equity-backed publisher, which does business as Ambassador Yellow Pages, was founded in 1999. It issued a Manhattan directory the following year, and now publishes directories for every borough, including two for Nassau County and a bilingual edition for the Bronx.
Ambassador was one of the first publishers to develop and implement a local SEM offering, initially using ReachLocal’s platform/service and then its own. Ambassador is now the third YP publisher that has sought bankruptcy protection.
People need to remember that bankruptcy doesn’t mean out of business, and many businesses emerge from Chapter 11, but it does illustrate the pressure the industry is under.
Recall that I posted about Dave Carroll and the mishap with his guitar and United’s baggage handlers. His video on YouTube about his experience saw millions of streams.
Now the UK’s Times Online claims that the episode and subsequent damage to the brand caused by the widespread viewing of the YouTube video resulted in a drop in the market cap of United, essentially costing the airline $180 million:
Meanwhile, within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines’ stock price to suffer a mid-flight stall, and it plunged by 10 per cent, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars.
The airline’s belated decision to donate $3,000 to the Thelonious Monk Institute of Jazz as a gesture of goodwill (Carroll said he was beyond the point of accepting money) did nothing to contain the damage.
It’s unlikely that the Carroll-related bad PR single-handedly caused this. But let’s assume that it may have contributed to some set of factors that together caused investors to sell United shares. It’s an illustration of how costly bad customer service can turn out to be in the age of social media.
As I said before, an ounce of prevention . . .