Guest columnist Marty Himmelstein is a local search expert who founded Long Hill Consulting. He was with Vicinity Corp. (acquired by Microsoft) and wrote one of the original “local search” patents before that term existed. The sentiments in the article are entirely his own. I have not contributed to or edited the piece.
Google’s recently announced Business Referral Program, where it pays individuals to submit information about local businesses, is important less for what it is than what it will be. It is a signpost not only of Google’s intent, but of their understanding of how the Internet will develop. For while Google doesn’t make trends, they do have a keen eye for discerning them. Their patient execution of a plan based on their reading of the road ahead is nowhere more apparent than in local search. These trends have been remarked upon before, and at least some of Google’s advantage is that while others watch Google, Google’s attention is straight ahead. These trends include:
- Decentralized collection of business content, from the edges in The infrastructure that gathers blog posts from the far reaches of the web is as well-suited to aggregate content from businesses, wherever they are physically located. Teenagers create YouTube videos because they have free time. Businesses will create YouTube videos because of competitive necessity. Undoubtedly they’ll have teenagers create videos for them, melding free time with usefulness and profit, a prospect which should cause YP Publishers to reach for the smelling salts.The centralized collection of business information was an artifact of the organization of the telephone network. This was fine for YP Publishers but less than ideal for either businesses or consumers. By creating the communication channels that enable businesses to directly control their symbolic representations, the Internet has made the contrivance of centralized content collection unnecessary. In the not too distant future the idea that businesses are responsible for both their digital and physical storefronts will seem entirely unremarkable.
- The importance of community and neighborhood to local search: The fundamental role of a community in local search is to establish an environment of trust so that users can rely on the information they obtain from the system. Businesses exist in a network of customers, suppliers, municipal agencies, local media, hobbyists, and others with either a professional or avocational interest in establishing the trustworthiness of local information. These community members can contribute unique perspectives to create a rich and accurate depiction of the businesses with which they are involved. The group targeted by Google’s new program, college-aged students who want to earn extra spending money, hardly comprise a community as described. But it is a start. One must assume the current program is a precursor to a more disciplined and organized initiative where Google works with organizations that have more substantial relationships of trust in the local community.
- Rich and structured content: The program announcement said nothing about structured content. It didn’t have to. The information Google gathers is headed right for Google Base. The initial content Google is requesting is basic, but the sky is the limit for what is to come. For example, Google Base already supports a product type, and there are several ways Google could make it easy to associate information about products and the stores that carry them. And, YouTube as a local search interface sounds pretty intuitive.
- Completeness is key: One of the fundamental tenets of local search is for it to be useful it must be complete – if there is a shop on Main Street it will be in the database. Completeness is necessary to gain the trust of the two most important local search constituencies – consumers and local businesses. Google states it simply: “Google wants local businesses to be easily discovered by people using our products. And we want their information to be accurate and complete.” Google has built its dominance by layering advertising on top of the best natural search results in the business. They will tenaciously adhere to the same philosophy in local search.
Some Google competitors might take comfort in the apparently haphazard and unfinished feel of various Google offerings. A more appropriate response would be alarm. Google’s fledgling projects are part of an encompassing architecture measured not in a year or two but five or more. (Consider that the results of a typical Internet Yellow Pages search have barely improved in the last ten years.) It is inevitable that the Internet will displace other mediums as the starting point of practically all local advertising – including advertising destined for print, television and radio. It will also take time for Google and others to demonstrate the value of local search in a way that makes sense to Small and Medium Businesses (SMBs), and other actors in the local search community. There’s still a lot of spadework to be done, and combined with the sheer size of the local search market, the extended adolescence of Google Base, Google Coop, the Business Referral Program, and other projects is closer to necessity than profligacy. The current value of the content in Google Base is of no consequence. Its function is to help Google build the next generation of Google Base, when content will matter.
Basic business content doesn’t belong in a walled garden. (Bill Burnham has a great series of posts on the problem with walled gardens, and on Google Base.) The ‘owners’ of business content are business proprietors themselves, and they can do what they wish with their information. They can provide it to Google, Yahoo, their local newspaper, whomever. Nor is Google Base is incompatible with open content. The Google Base data specification (based on RSS/Atom) could even serve as an open or de facto standard for specifying business content – there are just so many ways to express business information in XML. Much of the technology, in the form of RSS, is already in place to enable local search directories (not just Google) to aggregate content directly from businesses or proxies who create content on their behalf. (The college students who participate in the Business Referral Program are a simple form of proxies.)
The danger is that Google, aided by the inaction of the rest of the industry, patiently accumulates a data asset of basic business information. If Google makes it easy enough for SMBs to contribute their content, Google could have its walled garden, by default. It could be that by the time the bulk of SMBs understand the relevance of the web, Google will be their preemptive first and only choice for interacting with it. In this scenario, the criteria for success for the Referral Program is soberingly low. Google needs only enough early adopters to bring along the bulk of more conservative businesses.
The data providers who vigorously defend the current value of their business directories have the most to lose, because if business content remains in a walled garden, it won’t be theirs. If their sales channels are to have future value, it is not in building the next generation data asset, but in providing a migration path onto the Internet for their customers. The value is the relationship, not the data. (But the relationship is just a start, it guarantees nothing.)
Google will build a high quality directory of local business information. This directory and its integration with Google’s other services will give Google a competitive advantage in local search, but the fortress it builds won’t be impregnable. This is because Google’s unassailable strength in corpus-based search is not of primary importance in local search. Whereas the web continues to grow and is beyond the wherewithal of all but Google and few others to manage, local search models a small bit of the physical world, and the bit it models is modest in size and constrained in its rate of growth. Further, local search depends less on algorithmic richness and more on collaborative content creation and social computing, areas in which Google doesn’t have a preemptive advantage.
Any chance at a level playing field in local search disappears if the field isn’t built on open content. The easier it is for businesses and their designees to create, maintain and distribute their content, the harder it will be for any one player, whether Google, Yahoo or Microsoft, to construct a walled garden from that content. Google will be a prominent distribution point of local data, but still just one of many. But if there is going to be any game at all, its basic rule is if Google doesn’t get to build a walled garden, nobody does. Local content is not a defensible asset.
The predicament for Google’s competitors is that the cost of failure of the Business Referral Program for Google is low, but the cost of its success for others is high. There is virtually no scenario in which Google doesn’t play a key role in defining the local search ecosystem – Google Maps alone ensures that. Yet, Google’s ability to monetize local search doesn’t require they “own” business data and keep it behind a walled garden. A proprietary data asset constructed from commodity content is incompatible with the participatory nature of the web. Google isn’t going to waste its time doing what can’t be done. Further, Google could easily decide the effort to build a direct relationship with businesses is more of a burden than an opportunity. They could leave that job to others, opting rather to provide tools and incentives that ensure the road for content between businesses and Google is easy to traverse. On the other hand, Google wants business content as much as anybody else and they will do what is necessary to get it. If in the process of collecting business content they create barriers that make it harder for others to compete, so be it. Google will use the fecklessness of their competitors to their advantage – they will exploit opportunities to be opportunistic. Competitors inadvertently accommodate Google by their failure to provide an infrastructure to specify, collect, and share business content. The infrastructure won’t work if its intent is to be an alternative to the developing Google ecosystem. Rather, it is necessary to ensure that Google doesn’t get to make all the rules.