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.

As I stated in my last yearly predictions, I think 2008 will be the year of identity, where we start solving the problem of having to create (and remember) multiple username/passwords to access all the sites we visit. A panel yesterday morning at SXSW08 offered us a glimpse into what could be THE solution for solving this issue: OpenID.

What is OpenID?

• A decentralized mechanism for SSO (single sign on) that tries to solved the username/password problem
• It’s a URL (an identifier) - the OpenID protocol lets you prove you own the URL
• Simple registration
• You can read more about what is OpenID here.

Why OpenID?

• Many people in the past have tried to solve the issue: Microsoft Password, TypeKey, Facebook
• But SSO with a single controlling authority betrays the principle of the web

Yahoo! & OpenID

• Yahoo is now an OpenID provider (has been since January)
• It means you can log-in to OpenID-compatible sites using your Yahoo log-in information (the reverse is not true though).

How to implement OpenID?

• See this presentation.

What it means: I think the consensus is that OpenID as a technology is ready to go, but it still lacks “marketing” and “user-friendliness”. Companies including Clickpass are trying to address that problem. See today’s coverage on Techcrunch for more details. Expect this technology to make waves in the next 12 -18 months. My Praized partner, Sylvain, is already talking about organizing a OpenID DevCamp in Montreal. Anyone else interested?

Yesterday afternoon at SXSW08, Steven Johnson, Outside.in’s CEO, was interviewing the brilliant Henry Jenkins, Director of the MIT Comparative Media Studies Program. I’ll come back to Jenkins’ insights in a later blog post.

Johnson, while talking about hyperlocal, collective intelligence and communities, unveiled a screenshot of a soon-to-be released feature of Outside.in called “On My Radar”. According to the sneak peek page, “On My Radar lets you zoom down and see all the current buzz on the block you’re standing on, while simultaneously keeping tabs on places around the country that interest you.” It uses Yahoo’s FireEagle location technology.

(see the bigger image here)

What it means: On My Radar is very similar to the Facebook newsfeed, one of most interesting features of the popular social network site. I like the fact that they’ve segmented the geographical elements from the very hyperlocal (within 500 feet of you) to the city-level (Brooklyn). I see two challenges to this idea: depth of content and activity. Without these two, a local newsfeed is less relevant. But if they can mine enough information (and frequent updates) from local bloggers and Outside.in users, this might be a very interesting way to discover hyperlocal news.

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”?

“Microsoft to Pay $31 Per Share for Yahoo, Totaling $44.6 Billion in Cash and Stock. Microsoft said it sees at least $1 billion cost savings generated by the merger, and intends to offer significant retention packages to Yahoo engineers, key leaders and employees. The software giant said it believes the takeover would receive regulatory clearance and close in the second half of 2008.”

(via Yahoo Finance)

Update: just listened to the conference call. Clearly, vertical search and social media is high on the Microsoft priorities and buying Yahoo! gives them precious assets there. From a local search perspective, mobile was mentioned many times.

What it means: that rumor had been circulating for a long while now. This has the potential to create a powerhouse in local and social. More details during the conference call.

In business blogs everywhere, it’s that time of the year again, when we start looking back at the year that was and we start to forecast what 2008 will look like. In this post, I look back at 2007 and discuss the most significant local and social media news of the year.

1) Facebook

Clearly, Facebook was the number one news of 2007. By allowing anyone to open up an account in the Fall of 2006 (at about the same time they introduced their newsfeed function), Facebook paved the way for the arrival of tech enthusiasts and early adopters/influencers. Silicon Valley got very excited in the Spring and the launch of the F8 platform in May, allowing third-party developers to build applications, brought more excitement. I believe early adopters’ interest in Facebook has peaked (and has even started to decline) but the job is done. More than 55M active users of all ages access the site every month. The social network had a couple of setbacks around the end of the year with the beacon fracas and the launch of OpenSocial by Google but I believe it does not tarnish their luster. Facebook retaliated by opening up their infrastructure. The biggest benefit to the Web in general: Facebook is introducing people to the social web (micro-blogging, blogging, pictures uploading, “friending”), people who will eventually graduate to more complex social applications.

2) The opening up of the social web

Symbolized by the publication of the OpenSocial standard, the web is becoming more social and more open. Additionnally, the announcement by Six Apart that Movable Type, their leading blogging software, is going open source and the launch of the DiSo initiative to create open source implementations of distributed social networking are also important projects. Social will be part of the fabric of the web.

3) The launch of the iPhone and the unveiling of Android

Apple created quite a stir in June by launching the iPhone, a beautiful device that changes the way we see mobile web access. It’s not a perfect machine by any mean (still very closed) but it’s a game changer. The Android mobile platform by Google is also potentially very disruptive and paves the way to an interesting 2008 in that field. Local mobile search, the famous holy grail of local search, is on the verge of becoming reality.

4) The acquisition of Ingenio by AT&T/YellowPages.com

This purchase is a critical move for YellowPages.com and it clearly signals to the rest of the directory industry that call-tracking/pay-per-call will be the unifying standard in local product bundling, allowing a single sales force to sell multiple media formats. In the same vein, Marchex acquired Voicestar earlier this year.

5) The Radiohead “pay what you want” experiment

Even though it wasn’t as radical as industry watchers wanted it to be (Radiohead is still going to release a CD version of InRainbows), this trial by one of the most preeminent alt-rock group generated a lot of discussions in the blogosphere. Consumers were allowed to pay whatever they wanted to pay for the download including not paying at all. ComScore released some disheartening information about the percentage of people who paid for the album but that was quickly shot down by Radiohead’s management. In any case, the music industry needs more bleeding edge experiments like this one to find their future business model(s).

6) Reality check in the local search industry

The last two Kelsey conferences offered a sobering and realistic look at the realities of local search. Local is tough, hasn’t been cracked yet but offers tremendous opportunities. Stakeholders are realizing that partnerships will be needed to succeed. Two senior executives from the print directory industry talked openly about the opportunities and challenges of being a traditional media publisher and it was the first time that we heard that kind of discourse publicly. Google, Yahoo and Microsoft are all courting traditional local media companies that possess large sales forces to help them increase local revenues. I think we’re getting close to the “acceptance” stage of the Internet grief cycle and we should see a lot of action next year on the local search front.

I’d love to get your feedback on 2007 events. Anything important I forgot?

As most product managers will attest, the temptation is always great to add new features when building a product. Evan Williams, Twitter’s founder, did a short presentation yesterday afternoon at the Web 2.0 Summit to talk about how we can build better products by removing features instead.

Knowing that Williams created Blogger at Pyra Labs, he defines Twitter as a blogging application with a maximum of 140 characters and no formatting. But he says that Twitter does not compete with current blogging applications as it offers a different experience. They originally built their technology to use with an already existing ubiquitous friend status network: the SMS, and SMS basically come with a command line.

They quickly realized that the majority of people went directly to the Twitter web site, many of them using 3rd party apps built on their API. They now have hundreds of applications today because “text integrates well with everything”.

He offered additional examples of sites or technologies that kept things simple (or that should keep things simple):

• YouTube has a 10-minute limit for uploaded videos. This definitely had a beneficial impact on the service as it created addictive, ready-for-the-web content.
• Podcasts would certainly benefit from a time limit to become a more successful phenomenon.
• What about a social network that limits you to 10 friends?
• What about a dating site with only a picture and a yes/no button? (Hot or Not)
• What about an e-mail tool where you can only have 20 messages in your inbox?
• What about a competitor of MySpace where only college students are admitted? (Facebook)
• What about a competitor of Yahoo with only a search box on white page? (Google)

On Monday, Yahoo Search launched improvements to their search engine including something they call the “search assist“. Like some other bloggers, I wasn’t too impressed until one of my friends showed me how you could use it in the context of people search.

If you do a search for my name on Yahoo and trigger the search assist, you can now see concepts associated with my name. The keywords Linkedin, Facebook, Robert Scoble, local search, social networks, blog archive, online media and product management appear in the search assist screen. As my public face on the web is mostly professional, all these keywords are bang on and offer a good representation of who I am on the web:

Linkedin: I’m a heavy Linkedin user and the site has a great SEO strategy.

Facebook: I’ve blogged about Facebook a lot during the summer and some of my ideas had big impacts in the blogosphere.

Local search and social networks: my job and what I blog about.

Online media and product management: my job.

Robert Scoble: I discovered what Robert was doing with Facebook and blogged about it, creating an important Web meme.

The people-search site Spock uses tags to convey the same kind of related information. Unfortunately, on a search for my name, the info is much more limited as it comes only from my Linkedin profile. It misses a large portion of my other online activities, most notably the blogging.

What it means: structured business data has always been the bread and butter of the directory industry but most publishers have put their residential search function on the side, not really caring about it. Be careful! Residential or people search is a great traffic driver into your ecosystem of web sites and many people are after that traffic. By introducing structured people search, Yahoo, Spock and others are making it much more relevant. Residential search is about to be disrupted.

Scott Karp from the Publishing 2.0 blog lists five arguments explaining why mobile is not yet very exciting:

1. Wireless carrier networks are SLOW
2. Public WiFi access is a SCAM
3. Sites aren’t formated for small screens
4. Mobile device screens are too small
5. Advertising gets in the way

What it means: I agree with his assessment, especially in North America. I’ve often been asked by traditional media publishers: “How do we leapfrog Google, Yahoo, MSN?”. I think one of the potential answers is Mobile. I’ve never been really excited by mobile’s potential until I attended the Web 2.0 Expo last April. I got the feeling when I was there that mobile is about to become real. Something in the zeitgeist, about the convergence of the various interests of hardware manufacturers, content publishers and the technological community. I think we’re still 24 months away from tangible results but, if you operate a local media business, you should be thinking hard about mobile today. You should have a couple of dedicated resources working on the mobile strategic plan, thinking about user experience specifically adapted for mobile browsing and the 3-inch screen, thinking about what kind of ads will be most efficient in that medium. Send that team to Japan or South Korea to see what people are doing with their mobile devices there. Invest some dollars now. Mobile is all about local and you can’t afford to miss that wave.

Update (& related topic): my friend Colin talks about overpriced mobile data plans in Canada

TechCrunch reports on a secret meeting that happened at Google in the last few days. It looks like Google is about to “out open” Facebook by allowing developers to leverage Google’s social graph information.

The short version: Google will announce a new set of APIs on November 5 that will allow developers to leverage Google’s social graph data. They’ll start with Orkut and iGoogle (Google’s personalized home page), and expand from there to include Gmail, Google Talk and other Google services over time.

On November 5 we’ll likely see third party iGoogle gadgets that leverage Orkut’s social graph information - the most basic implementation of what Google is planning. From there we may see a lot more - such as the ability to pull Orkut data outside of Google and into third party applications via the APIs. And Google is also considering allowing third parties to join the party at the other end of the platform - meaning other social networks (think Bebo, Friendster, Twitter, Digg and thousands of others) to give access to their user data to developers through those same APIs.

And that is a potentially killer strategy. Facebook has a platform to allow third parties to build applications on Facebook itself. But what Google may be planning is significantly more open - allowing third parties to both push and pull data, into and out of Google and non-Google applications.

That big rumor comes on the heels of another big announcement from Six Apart about open sourcing the Web’s social graph (a la OpenID). If you thought the Web was fragmented, wait until you can start building application on top of Google, Yahoo or MSN’s social graphs…