The Praized Blog

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?

AT&T held an analyst conference today and Ray Wilkins, Group President - Diversified Businesses, was presenting the “advertising and search” portion of the allocution. The presentation shows that YellowPages.com currently generates approximately $550M in revenues and that AT&T is aiming at more than $1B in revenues in 2010 for the site. They also expect a good revenue lift from advertising appearing in U-verse, their interactive television product.

Other interesting data points include:

• Print and Online Ebitda margins in the mid-40% range in the next three years
• Mobility advertising starting end of 2008
• 2 billion search queries in 2008 and 3 billion by 2010.

You can find the slides (.pdf) here.

(found on PaidContent.org)

The Wall Street Journal reports (via ZDNet) on Google’s efforts to disrupt the wireless industry.

Of note:

“Within the next two weeks, Google is expected to announce advanced software and services that would allow handset makers to bring Google-powered phones to market by the middle of next year, people familiar with the situation say.” (…)

“The Google-powered phones are expected to wrap together several Google applications — among them, its search engine, Google Maps, YouTube and Gmail email — that have already made their way onto some mobile devices.” (…)

“Developers could, for instance, more easily create services that take advantage of users’ Global Positioning System location, contact lists and Web-browsing habits. They also would be able to interact with Google Maps and other Google applications. The idea is that a range of new social networking, mapping and other services would emerge, just as they have on the open, mostly unfettered Web. Google, meanwhile, could gather user data to show targeted ads to cellphone users.” (…)

In related news, it looks like Google is the first choice among wireless developers for developing location-enhanced application.

In another related news, YellowPages.com (owned by AT&T) announced the release of a version of their site for the iPhone. According to iLounge, “the new web app can be used by visiting yellowpages.com on an iPhone or iPod touch”

What it means: if I read between the lines, I think Google is trying to get the better of Facebook via their mobile strategy. Google is clearly designing a mobile development platform that will include basic Google applications like search, video, maps and e-mail. Developers will be able to build additional features and functionalities on top of these building blocks (like Facebook apps). Combined with the GPS-enabled phones, you will truly be able to create local social networks.

Readers of the Uverseusers.com forum have posted screenshots of the YellowPages.com channel you can now find on AT&T’s U-verse, their IPTV play.

(originally reported on the Zatznotfunny blog)

What it means: I often talk about media fragmentation. This is yet another good example. Surfing the Web on your TV either through a set-top box or a videogame console is something I see more and more. Make sure your content is ready for these new formats.

According to TechCrunch, InsiderPages has been sold to a public company. They add: “Our understanding is that the acquisition price is more than the total capital raised by the company, but not by much.”

SFDaddyo commented that “Rumor has it that they were for sale for less than $10 million”.

Peter Krasilovsky adds on The Kelsey Group’s blog: “I would speculate that possible purchasers are probably CitySearch, Yellowpages.com, or RH Donnelley. Theoretically, Yellowpages.com and RHD would have the most to gain from such an acquisition, since they could use the 600,000+ reviews as a building block for their own review archives. Yellowpages.com, in fact, has just rolled out a review feature, and it is going to be tough to ramp it up quickly. They could also use Insider’s crack tech team. But some people’s money would actually be on CitySearch as a buyer. While CitySearch wouldn’t incorporate the technology, it would like to get ahold of the 3 million+ unique viewers that come to the site every month. It could also gain from SEOing all the businesses that are covered. I bet there isn’t even ten percent overlap with CitySearch. Theoretically, City could also integrate “Insider Advice,” a Yahoo Answers-like feature. Still….$9 million or so is a lot for what are –basically– aging reviews.”

What it means: I had tried last week to do a “back-of-the-envelope” valuation model (based on the Switchboard.com acquisition by InfoSpace) which put their value at around three to four times the total raised by the company. If TechCrunch is right (and they’re usually pretty good!), my model was faulty as it looks like they we will be sold for a little
bit more than $10 million. Which might mean that the original investors will not get much out of the transaction (there were two investment rounds). I’m not sure Citysearch would get much out of Insiderpages though. I suspect the acquirer might be one of the big three US directory companies (YellowPages.com, RHD or Superpages).

From the press release:

YellowPages.com , a subsidiary of AT&T Inc., today announced it has rolled out user reviews to its national site, enabling consumers to share opinions on local and national businesses

The service allows consumers who register with the site to rate businesses from one to five stars, with five stars representing an “exceptional” rating. Site visitors can also write original text recapping their experience with businesses.

YellowPages.com visitors will automatically see the average rating of businesses to the right of listings, with the number of total ratings and reviews for the listing indicated in parentheses. A “Read Reviews” link allows visitors to read reviews in full, which are posted alongside the username of the reviewer and the date the review was submitted.

Update: Greg Sterling says that initial user reviews are coming from Judy’s Book their own beta test.

What it means: user reviews are now definitely a key element of any local search site. In this implementation, I like the fact that the merchant can interact with the reviews and comment back in the site a la eBay or Citysearch. I think that’s the right way to integrate user reviews.