Archive for 8th March 2007

Google Local Attacks City Search – Google’s Huge Competitive Edge

Today the Google blog announced a new Google Local feature that shows pictures, reviews, and other information inside a frame when you click on an entry (see pictures). The whole thing is very slick and intuitive. Reviews and pictures are scraped and standardized from a wide range of sources, allowing for quick and informative assessments about a business. They use hotels as an example: to know exactly where a hotel is located, what its rooms looks like, and what others are saying about – all in one place – is extremely useful!

Over all, this alone makes for a great set of enhancements, but it doesn’t stop there.

click on the listing to expand to this

What’s really cool is the second feature they announced: editable business listings!

you can edit or add more listings

As you can see, you can create or edit entries:

see what you can edit

You can specify details such as a description, what credit cards you accept, exact operating hours (even supports multiple time ranges in a day), an official search-engine recognized link to your website, categories (e.g., movies, pizza, etc), ambience, average price, general menu items, dress code, and a variety of other customizations. You can also upload images that are officially associated with your listing. Best of all, all changes are then confirmed over the phone or a postcard. Nifty.

Another neat thing it lets you do it move the address marker (the little red thing). This is cool in that it can help you fine-tune exactly where your business is inside, for example, a mall. The interface for that is pretty neat: you get to drag the little target around and the “x” represents where the target will appear when you “drop” it (has a cool animation too).

you can drag that thing around

All these features add up to a huge competitive advantage. Businesses that don’t have web sites (very common, still) can now be indexed, but they won’t appear on competing search engines! That’s a pretty nice tactical advantage against sites like MSN and Yahoo, assuming merchants sign up with only you. Of course, in the long term, such an edge will dwindle as business owners go modern and increasingly have web sites.

But the business that is most directly threatened is City Search. With Local search results directly linked off of their main search engine, they can easily skim traffic that would have otherwise gone to sites like City Search or Yelp. Having already spidered external listings, and having its own exclusive listings, I can see people choosing to use Google Local before other directories. Mind you, some percentage of the traffic will still end up going to the sites that the content is scraped from, but remember that if Google builds its own database, it is able to take a significant cut of the pie for itself without having to share the traffic. In the long term, this is a major threat to any business directory web site.

Just Take the $1.5 Billion and Run, Idiot (History Repeats Itself)

I’d like to pseudo name this post: Ideas with Dumb CEOs.

Mark Zuckerberg is testing history every time he turns down an offer hoping for more.

In high school, Zuckerberg … created Synapse, a plug-in for Winamp media player that automatically creates user playlists based on previous song preferences … many large corporations offered to buy it for as much as $2 million. Zuckerberg … declined those offers at first. By the time they changed their minds after entering college, the offer was no longer available.

Why didn’t he sell out for $2 million? Because he thought he could get more. History repeats itself.

Some of you may recall that Yahoo was prepared to pay up to $1.62 billion for Facebook a few months ago. But Facebook turned this offer down, waiting for the $2 billion offer.

Well, now we have news that Facebook ads perform worse than Myspace ads by a factor of two, which isn’t surprising considering that Myspace has a more diverse (and older) crowd than Facebook.

Myspace, is a better medium for marketers: for a similar set of advertising campaigns, its click rate, a measure of the audience’s engagement, was 0.10%, more than twice Facebook’s … “Facebook was consistently the worst performing site on just about every campaign we ever ran with them.”

For a company asking for $2 billion with a supposed revenue (not profit) of $150 million, this isn’t exactly great news. Revenues are generated when you have people buying your ads, but if your ads are known for being ineffective, then your buyers – and thus your revenues – will fall.

End the greed and sell. Microsoft, who is friendly with Facebook, hasn’t taken the bait, and they’re notorious for taking losses for market share. If Yahoo can’t afford it and Microsoft passed, how many other companies have the synergy and cash to make such a large investment?

Google? Well, the CEO of Google recently said he has no plans for purchases of that nature. So who else? Hm?