The Praized Blog

Pat Marshall has been in the online directory industry basically since it was created. In fact, when introducing him, John Kelsey and Charles Laughlin (both from the Kelsey Group) called him “the father of Internet Yellow Pages”. According to the press release announcing his Yellow Book nomination, “ Marshall has spent more than 28 years in marketing leadership positions, including as a senior executive with Verizon, Frontier Corporation and R. H. Donnelley. At Verizon, Marshall led the launch and management of SuperPages.com.” So, it was with great pleasure I sat down to listen to this conversation between the Kelsey Group folks and Pat Marshall.

Q: Why did you get back into the Internet yellow pages (IYP) business?

A: I did not want to get back in IYP, I wanted to get back into local search. I also wanted to get back into action (as opposed to the consulting I had been doing in the last few years)

Q: So, is Yellow Book in the local search business?

A: Today we’re more IYP than local search, but the trajectory is going towards local search. IYPs are really good at finding who but not good at finding what.

Q: What are the areas you need to move into to to go into local search?

A: Three things: 1) Infrastructure. Business directories are yearly things and this does not work in the local search world. 2) Traffic. a key directory publisher axiom: advertisers advertise because users use. You need a qualified audience and we’ve done well with that (see this Comscore release). 3) Having inventory. Present a merchant in a context that’s appropriate for him. We don’t have enough inventory today.

Q: Where are you now on a scale of 1 to 5?

A: We’re at 3. We’ve made a lot of progress but I would like to move at twice the current speed. As a senior executive, I need to create the environment where that can happen. We need to focus on the collective IQ.

Q: What are you doing to develop a local search solution supported by research?

A: When people are using local search, they’re not shopping. They’re hiring. You don’t shop for a pool service, a lawyer. You hire these people. The process is three dimensional: urgency, risk, satisfaction.

Q: Let’s talk about verticals. Would the IYP product be further ahead if verticals had been developed earlier and deeper?

A: I don’t think we would have been better off. The industry has gone through enormous changes to get to 2008. In 1995, sales forces were unidimensional. The first year of Superpages.com, we generated $100K in revenues. We missed our target and it was the first time in my life I missed my target. Sales was afraid to bring Internet in conversations because they were afraid merchants would know more than them.

Q: Where is the value in Yellow Book’s online offers? Is it search engine marketing, is it YellowBook.com?

A: It really depends what the customer wants. In some situation, they only want what we called “Googlecaine”. So, you should sell what people are buying.

Q: What kind of partnerships are you looking for?

A: Anyone that can help me solve my three problems listed above. 1) Infrastructure products/services that reduce our costs (but bring a business case), 2) traffic (we’re always interested but talk about the quality of the traffic and how it fits with us), and 3) advertising/inventory products (talk to us about why it’s good for our customers, what skin are you willing to put in the game).

Q: Is it important for Yellow Book that Google, Yahoo!, MSN be successful in local search?

A: Yes, definitely. I doubt that they will invest into a local channel. So, they will come to us to resell their products.

Techcrunch reports on a rumor this morning that would have Google either buy Skype from eBay or Google partner with Skype.  According to the site,

“Skype, acquired in late 2005 for $3.1 billion, has been a financial albatross around Ebay’s neck. eBay removed Skype co-founder and CEO Niklas Zennstrom in October 2007, reportedly due to frustration at the financial performance of Skype. Ebay also negotiated down the huge earnout due to Skype stockholders and took a $936 million one-time loss around the transaction.  It’s clear that eBay wants to either unload Skype, or significantly drive performance.  Google, by contrast, is just beginning to think about how to dominate the voice space. They have a VOIP service through GTalk, a free 411 service and GrandCentral, a telephone management service they acquired last year for $50 million.”

What it means: I think this potential acquisition/partnership makes complete sense. IMHO, call tracking and pay-per-call represents a large portion of future local search revenues and Google clearly sees that local search is where they will get tremendous growth in the next 5-10 years.  By buying the Skype infrastructure (and user base) and combining it with the GrandCentral technology and expertise, they instantly get core assets to execute that strategy globally.

Annual revenues from mobile search services are expected to hit $4.8 billion by 2013, according to a new report from Juniper Research. Among the factors driving growth are the decline of carriers’ “walled garden” approach, falling data costs and the entrance of search heavyweights such as Google and Yahoo.

Local search will be the most popular service among advertisers, attracting 40% of mobile search ad spending over the next five years. Globally, China and the Far East are expected to generate most revenues from mobile search in the coming years, followed by Western Europe and North America.

(via Online Media Daily)

Related update: Matt Waddell, a product manager for Google mobile said in a Reuters interview: “We have very much hit a watershed moment in terms of mobile Internet usage. We are seeing that mobile Internet use is in fact accelerating.”

Second related update: M:Metrics reports on iPhone feature usage: “Two featured widgets, YouTube and Google Maps, are extremely popular among iPhone users: 30.4 percent accessed YouTube and 36 percent used Google Maps. In comparison, only one percent of all mobile subscribers accessed YouTube and 2.6 percent checked out Google Maps.”

What it means: more indication that local mobile search is about to happen.

“We thought it was a mistake and made our engineers check the logs again”

According to Apple Insider, “Google on Wednesday said it has seen 50 times more search requests coming from Apple iPhones than any other mobile handset — a revelation so astonishing that the company originally suspected it had made an error culling its own data.”

What it means: oh, oh! I think that’s he first real sign that mobile and local is coming… Get ready for the next evolution. More info in this Financial Times article.

As this week’s Mobile World Congress slowly winds down (tomorrow’s the last day), I thought it was appropriate to summarize the top 10 trends of the conference as identified by Infoworld magazine.

1. GPS on board. Amongst the manufacturers, Nokia “plans to sell 35 million phones with GPS” this year.
2. Better cameras with “face detection, image stabilization, and the ability to take better pictures in the dark”.
3. Linux. Google Android prototypes. ’nuff said.
4. Movies on your phone.
5. Geotagging that “combines built-in support for navigation and photography. When you take a picture, your location is also saved. Then you can overlay that information on services like Google Maps and see where you’ve been.”
6. Windows Mobile. “Four out of five of the biggest phone makers have phones based on Microsoft’s Windows Mobile operating system”
7. High-speed mobile Internet
8. Wi-Fi on board.
9. FM transmitters.
10. Touch-based interfaces.

What it means: phones are becoming more and more like mini-portable computers and trying to be at the center of your mobile life. In addition, more GPS on board and the geotagging functionality are very exciting stuff for a local search freak like me! I was also intrigued by the better face detection. Expect a day where you can take a picture of someone and, with his/her permission, become a “friend” in a social network…

Yesterday morning, I had the opportunity to moderate a social media panel at the Infopresse conference on social networking. Sitting on my panel was Guillaume Bouchard from NVI, a Montreal-based SEO/SMO firm. He explained to the crowd of more than 280 people how, by using social media tools, he manages to generate brand awareness and increase the online street cred of Canpages, a Canadian directory company competing against Yellow Pages Group in Canada.

It starts with the creation of original and quirky content in the Canpages blog. His team then seeds that content in the various social news sites like Digg and Reddit. Working with a large network of friends and contacts, he’s able to catch the eye of online influencers who might (or might not) promote that piece of original content.

His best success so far with Canpages has been this blog post about “Weird Canadian Restaurants”. It was submitted to Digg and generated 676 diggs and 101 comments. It was promoted to the first page of the site and generated good traffic (he did not disclose how much) for the Canpages blog. It was also favorited by people in StumbleUpon, another social tool that has the reputation of driving a lot of traffic. The post was well enough crafted to be picked up by Dan Mitchell from the New York Times, which generated some more traffic to the Canpages blog.

What it means: a great use (and a great understanding) of social media tools and sites to build a new directory brand and make it more exciting for “cool kids”. This is also a great strategy to build new incoming links to your domain, thereby increasing your page rank in Google. You’ve got to wonder though if there are long-lasting positive effects from both a brand equity and online directory site usage but I don’t think it hurts given the runner-up position they occupy in the market.

Most of my business readings this weekend have been various analysis of the potential Yahoo/Microsoft deal. Unfortunately, I haven’t been impressed by the level of the debate as many of the comments were all about “Microsoft is evil” and its corollary “Google is not”. I was hoping for more level-headed reflections but I think the involvement of Microsoft in the story created a highly-emotional environment in the tech blogosphere.

One of them stood out for me. Tim O’Reilly looked at the big picture and tries to extract some industry meaning, showing once again his crystal ball is one of the most polished in the industry. Talking about industry consolidation in general and Yahoo in particular, he offered:

The web companies that have a chance of surviving as independent entities are those that truly understand and exploit the rules of the new platform: harnessing collective intelligence to build rich troves of data that literally get better the more people use the application, running ahead of any possible competitor simply because of the network effects that pile on to keep them improving faster than any newcomer. Some of Yahoo!s properties (e.g. Flickr) have that characteristic, but Yahoo!’s business as a whole did not. It was ultimately a halfway house on the way to Web 2.0. It’s original business was based on a literal aggregation of user generated content, but it quickly became a more traditional content and services portal. Later companies like Google leapfrogged it by building services that tapped more directly into the native network effects of the Web.

The other important characteristic of the winners, of course, is that they tap into a data stream that really matters. Owning network effects around consumer photos, for instance, is much less powerful than owning network effects around paid search. So one of the key questions we have to ask ourselves going forward is this: what are the major data subsystems of the future Internet Operating System. Location, identity (and social graph), search (and not just web search but also product search, in which Amazon has a very strong position) come to mind. In a lot of ways, finding the data associated with the old vectors who, what, when, where, and how is a good place to start.

What it means: O’Reilly posits that local search (Location + Search) is one of the key elements of the future Internet Operating System. I completely agree with him. I would add that no one has locked the market yet. No one in that field is deeply embedded yet in the Web O/S. So, this still represents a major market opportunity. And the big question remains: who will own “where”?

As read on TechCrunch this morning,

MySpace is finally getting ready to pull the trigger on its long-awaited platform for developers. Starting today, programmers can sign up to register for the MySpace API program, which will go live on February 5th. The APIs will allow developers to create social applications for MySpace much like they can already for Facebook. The platform will be compatible with Google’s OpenSocial platform, meaning that applications written for OpenSocial will work on MySpace with a few minimal tweaks.

More details will come out later about what exactly the APIs will allow developers to do, but at a high level they will allow for deeper integration into MySpace than can currently be done with Flash widgets. The APIs we believe will support Flash, iFrame elements and Javascript snippets, and give developers deeper access to MySpace member profile information and their connections. Developers also will be able to make money from advertising associated with their applications.

What it means: with all the talks about Facebook in the last 6 months, we tend to forget MySpace is still a major force in the social networking world. According to this recent eMarketer article, “The site received 72% of US visits to social networks in December 2007 alone” with Facebook a distant second at 16.03%. In terms of reach, MySpace had close to 72M unique visitors in October 2007 (source: eMarketer quoting ComScore) giving the site 40% reach of the US online market (Facebook is at 18%). In November, Compete data showed that only 20% of MySpace members were also on Facebook. So, if you’re interested in reaching these 72M users, get in line to get a developer access.

Google is now showing 10 local listings in all local category searches in their main search results pages. I’ve captured a few examples below. What’s interesting is that no address is shown (only the phone number) but the clickable link goes straight to the merchant’s web site.

Lawyers in Montreal

Doctors in San Francisco

Architects in New York

(As seen on SearchEngineGuide)

CNET’s News.com reports on a new forecast from Swedish analyst firm Berg Insight predicting that “the number of GPS-enabled handsets is set to more than triple during the next five years”.

Growth in the GPS-handset user base should also lead to more applications that use such information, Malm (a telecommunications analyst at Berg Insight) added, pointing to the success of currently available location-based services like Google Maps. “Perhaps it is not right to call them services, but small apps that use location as a filter or enhancement–we will see a lot of that going forward, once developers and users get more used to using location,” he said.

Berg’s press release adds “The availability of accurate position data in mobile devices creates exciting new opportunities for developers of local search, navigation and social networking applications”, said Mr Malm. “Nokia and Google will be two of the foremost players in this arena but there is a good chance that the development will also give birth to the next Facebook or MySpace.”

Flickr photo by Jimmy_Joe

What it means: I am truly excited about these numbers as local, social and mobile combined really has the potential to create the next big web phenomenon. But one thing concerns me currently in that space: the creation of an even playing field. In 1995, barriers to entry on the World Wide Web were low (even non-existent) and allowed the creation of Yahoo and eBay (current combined market cap: $67B). Still today, the barriers to entry for new Web projects remain very low. It’s not the same in mobile where there are a lot of gatekeepers. Handset manufacturers and Telcos come to mind, but the position of strength major portals and search engines enjoy through their relationships with the aforementioned gatekeepers make their stranglehold very difficult to break. Because of that, I wonder if we will see a real innovation burst in mobile/local in the short term. It will come, I have no doubt about it, but it might not come as quickly as it potentially could be.