Local Database to Become a Commodity?

TechCrunch, seemingly unaware of the the larger context of its suggestion, asserts that it’s time for an “open database of places.” This emerges logically out of the proliferation of local-mobile applications and the common-sense desire to have access to a single, accurate database of local businesses and points of interest (POI) that developers can rely upon. Trouble is, as TC points out, data is frequently regarded as a strategic asset.

Indeed, it is . . .That’s why the Telcos fought all the way to the US Supreme Court (Feist v. Rural Telephone Company (199)” to prevent third parties from gaining easy access to it. Feist made possible the various local databases that exist today and many of the sites that rely on local data. Without this decision there would likely be no Yelp or Foursquare.

This “open database” concept is different version of a similar conversation I had earlier this week with Localeze. We discussed the possibility that the local database would eventually become a “commodity.”

Placecast’s new Match API is an effort to reconcile all the conflicting local data being used by a growing number of players. If it gains widespread usage, what may emerge is a unified local database that can be “re-syndicated” for free or low cost. Regardless of whether this is the precise vehicle, the market is moving toward what TechCrunch is suggesting.

The three main local data providers, InfoUSA, Acxiom and Localeze, are trying to build enhanced datasets or developing new services on top of the base local data. (I wrote about this in the context of Localeze last week.)

All of them recognize that a time is coming when the local and POI data will be widely available for less money than it takes to access it today. Google, for its part, sees this data as strategic and so is collecting more of it itself (via Street View and UGC) and relying less and less on third parties (e.g., TeleAtlas). It’s possible too that Google would at some point seek to be that local data source. Witness the effect Google Navigation — which motivated Nokia to make its navigation free — has had on the PND/GPS market.

From the business side, it would also be great if there were a single database into which local businesses, national chains and other interested parties could enter, correct and enhance their information. However, despite several efforts toward this objective, it remains elusive. No single private company has been able to be the “single point of entry” or syndication for local data.

An effort to create a Wiki-based global directory of local businesses initially failed in the form of Yellowikis. Since that time Brownbook and Bizwiki have emerged, but they are destinations rather than open data providers. Citysearch is aggressively re-syndicating its local data and content though not providing an open database in the sense that TechCrunch is calling for.

Clearly the market wants a free or low-cost local database. So something will emerge that responds to that demand. The questions are:

  • When?
  • How will its accuracy be established and maintained?
  • What’s the business model to support it (e.g., donations, licensing)?

Bad local data can kill a local site or app. Conversely, giving everyone equal access to the same local data would not necessarily make all apps or sites equal; however it would put considerable pressure on the UI/UX and other variables to differentiate.

What do you think about all this and whether an “open local database” will come to pass?

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Related from TC: CloudMade’s OpenStreetMap Surges On Wikipedia-Like User Passion

While this isn’t the same as local business data, perhaps it’s a “proof of concept” for an open-source local database.

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14 Responses to “Local Database to Become a Commodity?”

  1. Howard Lerman Says:

    Greg,

    It would be cool if the open location database included standards for both organic AND paid listings. Standards for publishing and consuming paid local listings would certainly make lives a lot easier. Course if you got behind it, it would be more likely to happen :)

  2. Greg Sterling Says:

    :) It would really need to be a trade group, something akin to the WC3 for local.

  3. Malcolm Lewis Says:

    It would be beneficial for all if there were a common database of base data (name, address, phone, web) that different vendors could then layer proprietary data on top of. So then we at least have one unique entry for each discrete business, with agreement on basic contact info, but vendors like Yelp and others can still benefit from their hard-earned proprietary data and provide access via their own sites and licensing agreements. Nobody wins when there are duplicate entries for a single business because of small variations in their declared name and/or address and/or phone number(s).

  4. Greg Sterling Says:

    Yes that’s rational but getting from here to there will be challenging.

  5. Tim Cohn Says:

    As long as profits are at stake it won’t happen.

  6. Greg Sterling Says:

    Would tend to agree but the profit potential will diminish over time.

  7. Local Database to Become a Commodity? « Screenwerk « The other side of the firewall Says:

    [...] April 18, 2010 at 6:08 pm · Filed under Location based Services   [From Local Database to Become a Commodity? « Screenwerk] [...]

  8. Barnaby Oswald Says:

    Greg – this is exactly what The Local Data Company are doing in the UK – we have built a database of locations from the ground up, using a dedicated field research army. We collect data on 350,000 locations, and update it every 6 months in the field, by physically resurveying it. Our clients include all the people you would expect in search, IYP etc. It’s laborious – but we believe the only way to do it.

  9. Greg Sterling Says:

    Barnaby:

    Looks very interesting but there are also companies in the US that do this. The thing I was speculating about and commenting on is the idea of an “open source” database for locations and businesses. There’s clearly a motive to do a good job on this where there’s money to be made; it’s more challenging to consider this being done by individuals Wiki style or multiple companies trying to do this and allowing the data to be de-duped and shared.

  10. Barnaby Oswald Says:

    Hi Greg – it depends on how much data people want for ‘free’. An address would be ok – but the occupier, classification, contact details, photo, description, attributes could be where the fees start (as these are the data fields which change/cost to update). It poses an interesting question for a company like ours.

  11. Greg Sterling Says:

    I agree. It will be interesting to see how much of this “secondary” data or metadata starts showing up through users.

  12. Yodle Offering White Label YP « Screenwerk Says:

    [...] in a way. Are these “free” directories the “open local listings database” I wrote about over the [...]

  13. Tim Cohn Says:

    They always do… and that seems to also be a universal clarion call to low barrier to entry opportunists who think they can make up the difference with volume.

  14. Matthew Berk Says:

    There have been various attempts at this in the past, most of which have been efforts to squeeze revenue from local businesses, wrapped in the mantle of industry standards and openness, in which the results–especially for the customers–have been dubious at best. The real issue is control. Today, business owners do not control where or how they are represented online. Someone will eventually turn that model on its head, but not simply by declaring so: it requires a product angle, if you will, that we simply haven’t yet seen.

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