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If only I could look online and see that “19 out of 20 people who used this service rated Joe’s Garage as ‘Excellent’, one person out of 20 rated Joe’s Garage as ‘Shifty’”. The problem for YP is of course that many of their advertisers would run screaming from the prospect of customers rating them. Still, it’s nice to dream…

Another big problem for YP is how to ensure some kind of ‘fairness’ or moderately-equal opportunity for their advertisers. If the top 20 results in a heading (e.g. Florist) are all bought, that means advertisers who bought the cheaper heading styles (silver vs gold in the Australian yellowpages.com.au) get pushed further and further back despite still paying significant amounts of money. Those results are effectively hidden – no other serarch engine gets to scrape them, and there’s not enough content on the cheaper listings (in fact even on the most expensive listings) to justify users hunting through page after page when the only information that differentiates one adverstiser from another is their name and phone number.

So if you don’t want to pay large amounts to yellowpages.com.au you need to have your own website and investigate other options. At least Google/Yahoo/etc will still index your website and if you’ve made it useful and relevant enough return you in the top listings without you paying a cent.

At the moment YP is lucky that there are large numbers of small businesses out there still haven’t really got their heads around building an online presence and maximising the opportunities afforded by the various tools.

This is a sign of progress on the business end of local search. However, on the consumer end, it seems to me that there is still the dilemma for the end-user in being able to search local businesses and have the results ordered by quality. Yahoo and others use a “brute force” method of ranking that relies heavily on users explicitly ranking and reviewing businesses. Consequently, outside a few popular categories (ie: resturants), the average number of reviews per business tends to be small. Back in the late 90′s, web search engines like InfoSeek relied on a “brute force” method to index the web: people would manually enter URLs and descriptions. That model never scaled. But yet this is what we’re doing today with Local Search. No company has yet introduced the equivalent of PageRank for local search. This is exactly the problem that the company I’m involved in (called grayboxx), is attempting to solve.

Cheers,
Bob

Will Yahoo just delete the negative review to appease the advertiser?

Won’t they just be stealing from Paul (users) to pay Paul (advertisers)?

Then again, I’m really happy with what we are doing, so we will see

1) The have consumer behavior that has been continued for decades.

2) They have a sales model where scale matters and one of the only effective channels for selling advertising to millions of merchants.

Both of these advantages are about to break:

Consumer behavior is moving online with an always connected enviroment. The Local Internet is beginning to deliver as more than a critical mass of Local consumers are on the Local Internet looking for Local Merchants. From SMS search with http://www.4info.net to local news from http://www.Topix.net to rich local data from Yahoo Local and Google local, consumers are finding a better experience online—and now that better experience is accessable. Advantage number 1 is about to end.

There is enough money in local advertising on the Local Internet, that the industry is looking for an alternative to the “mafia like” tactics of these massive and slow Yellow Pages companies. (most of which are owned by private equity firms trying to extract as much cash as possible out of hard working honest local businesses with little to know results) The tactics the Yellow Pages use are NOT consistent with selling the high performance, inexpensive, and highly effective advertising that the Local Internet delivers. People who sell FEAR like the Yellow Pages can not sell the Hope that the Local Internet delivers. Of course they will try and any major ad network has to look at them as a channel for now becuase they are the only game in town. (They also have to do things like ride alongs and sales audits to make sure the Yellow Pages are not ruining the powerful internet brand as the Yellow Pages push to accomplish what so far has been miniscule results in terms of bringing local businesses online to use the Local Internet) A new channel for selling advertising from the Local Internet will be built in the next 5 years. It will be built because a $60B Local Internet advertising market depends on a low cost of acquisition channel for bringing 10M small merchants online. This new channel is going to destroy the second advantage of the Yellow Pages. Building that new channel is what we are working on at http://www.merchantcircle.com.

With both of these advantages destroyed, the Yellow Pages industy is going to shrink by 90% and in the end they will not be able to afford thier salesforces. In 10 years, the major ad engines will be selling ads in print yellow pages (because it will be cheaper for them to do it )and the print Yellow Page business will be absorbed by the companies who control the Local Internet Advertising market.

“MADRID, Yell Group, a publisher of Yellow Pages directories in Britain and the United States, agreed Friday to buy Telefónica Publicidad & Informacion for €3.07 billion to expand in Europe and Latin America.”

From the herald tribune

http://www.iht.com/articles/2006/04/28/business/yell.php