Local Search Sites and the Constant Whining

17 Jan
2007

Recently the three leaders in the online local search field (Yelp, InsiderPages, and Judy’s Book) have gotten a lot of attention. With them (and ultra-niche sites like BackFence) laying off people left and right, the trumpet has started to sound. Local search does not work!

What a load of poppycock.

Local search does work. Hiring an excessive number of people without any clue about revenue does not work. And that applies to any industry.

Lets look at InsiderPages. Techcrunch reported that IP let go of 2/3rds of their staff recently. To pause for a second – what were those 2/3rds doing? Searching for ‘pizza – Pasadena, CA’ (their hometown) yielded 13 CPC links all driven by Google. They had two local sponsors for what is one of the most coveted keywords in their hometown. Clicking on one of those local sponsors was brutal – take a look at this. If I am a local sponsor, why the hell are there six CPC links on my listing? Going back to their search results – at 1600×1200 resolution, the first non-paid link was halfway down. Didn’t the entire Google vs Yahoo battle prove that jamming advertising down our collective throat is not a good idea? Humbug!

At least InsiderPages is going for cost-cutting. Their map results use images directly from the Google server. Impressive!

Judy’s Book decided to go and become a shopping site. Pretty much immediately after the change, two things happened:

  1. Andy Sack (their CEO) posted that they just had their highest revenue day.
  2. A lot of angry members stated how much they hated the changes. A lot of venom was especially saved for the City Editor program.

While a lot of people are throwing accolades at Judy’s Book for getting out and surviving, I would say the jury is still out there. A lot of people were (are?) coming to Judy’s Book for reviews and other information. Only after 6-12 months will the full impact of their change in direction be noticeable. Personally I find Andy Sack’s blog very interesting – he is very open about his mistakes. It takes guts to do that.

Lastly, and the darling of them all – Yelp. This is a company that has gone through $6 million and needs another $10 million. They are definitely doing something right – a lot of people are registering there and talking. But has anyone actually looked deeply into it? A lot of the chatter there goes on in their ‘Talk’ section, which is just a forum. If there is anything difficult to monetize on the web, it is a forum. And has anyone read the reviews? They are more like popularity-contest stories and less like insightful comments about an establishment. I could be jealous, but that site reminds me of MySpace.

A lot of people will argue that millions of dollars are needed to gain market share and mindshare and so forth. Last I heard, Yelp claimed 1.5 million unique visitors a month (this from the TechCrunch article). InsiderPages was at roughly 1 million. To put that into perspective, iBegin, which covers one major city (Toronto), one capital (Ottawa), and one really teeny-tiny city in Michigan (Kalamazoo) does over 250,000 unique visitors a month. It seems the money being spent on marketing isn’t being spent very well.

What’s my point? There is a lot of waste. Its like evolution – the weak are being eliminated. There are many local-oriented directories that are doing very well for themselves. The problem is that the current crop of local search just doesn’t cut it.

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