The Praized Blog

I’m at the Google Local Markets Symposium today, an invite-only local search event happening at the Googleplex. I spoke this morning on a local search industry blogger panel with my friends Greg Sterling, Perry Evans and Peter Krasilovsky.

In addition to our panel, we heard from Richard Holden, Google’s Director of Product Management, talking about the various Google products targeted to SMEs. One of the major insights (for me) that came out of his presentation was the fact Google now offers free call reporting with any US local business ad. According to Holden, advertisers can choose to replace their regular phone number with a new free “trackable” toll-free or local number. This new feature might be the results of the GrandCentral acquisition.

This is not to be confused with the click-to-call function Google recently removed from Google Maps.

What it means: Google could start assigning new permanent trackable numbers for any media the advertiser chooses to advertise in. This would give Google tons of information regarding the ROI of various local media, allowing them to become a centralized advertiser dashboard. Given that the directory business is all about calls, this is potentially very disruptive to that industry in particular. As this involves serious customer disintermediation, I would recommend local media start looking at offering this option at large as well.

In a conversation with John Battelle this morning at the Web 2.0 Summit, Steve Ballmer, Microsoft’s CEO, disclosed the four things Microsoft will need to do if they want to reach their goal of having 25% of their revenues coming from advertising in the future.

1. Do search well
2. Be good at community and communications
3. Have a strong advertising platform that delivers all payloads in all media compatible with all business models
4. Have ads you sell on behalf of other people.

What it means: I was listening to Ballmer’s list and I quickly realized this sounded very close to what local search experts (like The Kelsey Group or Greg Sterling) have been suggesting to directory publishers in the last couple of years: build a better local search destination, leverage the sales force to sell a variety of ad products and launch social tools. Is Microsoft a potential partner for directory publishers or will it be seen as a competitor?

The same week I receive my Wired magazine in the mail with a great hyperlocal short story by Bruce Sterling, BackFence.com shuts down its network of sites… What a bad timing!

Rafat Ali in PaidContent.org asks: “Is there a real business in this kind of business?”

American Journalism Review answers: “ So far–and admittedly it’s still very early –the answer is no. A few of the estimated 500 or so “local-local” news sites claim to show a profit, but the overwhelming majority lose money, according to the first comprehensive survey of the field”

Jeff Jarvis says “Hyperlocal will not, I firmly believe, happen at one site. It will work only via networks: content, commercial, social. It will work by gathering, not producing.”

Greg Sterling continues: “no one should dismiss the underlying phenomenon that Backfence is a part of because it didn’t succeed financially.” and adds “Nobody thinking about or currently operating a local consumer site – unless you’ve already done it or have tons of cash – should be building a sales force, although a sales force is what it takes to sell successfully in local. (Telephone sales channels might be something of an exception.) Site owners should think about tapping into existing ad networks or sales channels as part of broader, geotargeted Internet distribution networks.”

My friend Perry chimes in: “is a hyper-local destination site the right model? The world of social networking, blogging, portals and news scanning are being thrown into the blender of web 2.0. I think too many venture-backed models are living in the comfort zone of a “destination site” strategy ALONE. I am not knocking it, I just view this as “necessary but not sufficient”. There is a new world being created where users roll their own internet, and the notion of having ONE PLACE for their neighborhood conversation feels increasingly contrived.”

What it means: lots of great insights from great minds. I don’t think there’s any doubt in my mind. Hyperlocal represents the future of the web. I know, I know, it’s almost counter-intuitive to the power of the WORLD wide web but here’s how I explain it. I remember when I first discovered e-mail on CompuServe back in 1993. I was e-mailing people I met in various newsgroups, people from all over the world! How exciting it was to “talk to strangers”! Then, my friends/family/co-workers started to get connected and got e-mail addresses. My volume of e-mail slowly went from people I did not know to people I knew. And a lot of these people lived close by as well!

Now, fast forward to 2007. I don’t know if you’ve had the chance to explore Facebook but it is a fascinating social experiment that resembles CompuServe. Lots of groups/communities are created and people join them if it fits their interest. One trend that I’ve seen is the creation of local groups of interest when it makes sense (i.e. when the equivalent global or national group becomes too big and loses its relevancy). There is a Montreal Tech Entrepreneurs group, a Montreal SEO group, etc. From a purely geographical point of view, I’ve already seen a group for my neighborhood and I’ve seen a group for a street (!?!) in my neighborhood. Now, are there many conversations in those groups? Not a ton, but there’s life out there. As more and more people get the tools to engage in hyperlocal conversations, it will happen. And it will happen in your neighborhood.