If there is weakness with Yelp, and with any major IYP, it is that they are trying to be everything to everyone. They will always be outperformed in certain categories if a competitor decides to focus in on, let’s say, Hair Salons. To be honest, I think this is one of the only ways to try to compete. As more and more IYPs keep popping up, and gaining 1,000,000 Uniques becomes more and more of the norm rather than impressive, the only way to compete is to focus and not try to serve every single local search you can just because you liscenced some data.

Currently there is about one new IYP popping up every week and they all seem to not offer more than Name, Address, Phone Number, and a Map. Now there is nothing wrong with that and they do provide value to searchers no doubt. But none of those IYPs are going to change anything. None of them are going to come close to what Yelp has done because none can offer a better experience. Now one could argue it is hard to compete with a company that has raised that much money, but I would say it isn’t. You just have to do it in the right way.

As I said earlier, the only way to compete is to offer a better experience. So unless you have $100 Million in VC money, you have to start out small.  Evan Williams wrote about this and put it as his #1 rule in his infamous “Ten Rules for Web Startups.”

Focus on the smallest possible problem you could solve that would potentially be   useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too.

There are two ways you can approach this in local search; you can either focus on one specific category such as Vets, or focus on a specific geographic region, such as San Diego. The latter of those two is where newspapers have fallen short and actually still have an opportunity to dominate those markets. Instead they have outsourced that part of their business to the likes of Local.com and MojoPages.  To be clear, there is nothing wrong with those two companies, but the fact of the matter is they will never be better than what Yelp is offering. They are a good revenue stream for both the newspapers and the white label providers but they will never crush it in their area.

If you look at the other side of the story at vertical sites, there are plenty of success stories with sites like The Knot.  The Knot focuses on helping brides-to-be find and plan everything they need to for their big day. They spend their entire time focusing on one particular event in a persons life, rather than focusing on all the other 300+ local categories as well. So how does this pay off? They are less dependant on search traffic from Google and rely on a ton more direct and referral traffic. Users spend a lot more time on the site rather than the typical 1.7 page views per visit on average IYPs.  They have a brand which is recognizable and they bring value that is unmatched in their niche.

Complaining about Google because they have made things like Place Pages for businesses is just plain dumb. If you can’t provide a better user experience for a search like “Happy Hour in Santa Monica” than this:

… then you need to change your business model. You need to adapt, because Google or anybody else isn’t slowing down.  And of course it doesn’t need to be happy hours, it can be vets, nail salons, or anything. If the industry wants to grow beyond just SEO and their family members using it, we need to start focusing on user experience and building beyond a name, address, and phone number.

Due to the fact that these ad types are limited to just mobile, you can imagine nearly all the advertisers interested in this offering would be local advertisers in one way or another. The most intriguing thing about this announcement, however, is how Google is actually using the click-to-call action in these ads.

Here is an example for the search “Hotels in Corona CA”

You can see that obviously Best Western is taking advantage of the newly announce Click-To-Call ads, but you also notice that on the ad there are three different blue links. Why is this significant? Well, these three different calls-to-action all lead the user to different paths to contact the hotel. This is very smart on Google’s part: they are basically saying that whatever the user clicks on must be what they are interested in; therefore, we should alter the user experience accordingly. So let’s take a look at what happens when a user clicks on each one of those links.

The most intriguing one of the three links is obviously the phone number. You would assume for click to call that they would use call tracking phone numbers right? Wrong.  That phone number shown above is the actual phone number of hotel. Here is what happens when you click that link below:

You are taken to a landing page designed specifically for the iPhone (the smart phone used in this case) and Javascript simply pops up the call function, prompting the user to “Cancel” or “Call”.  If the user selects “Cancel,” they then only have the option to view the listing in Google Maps or hit the call icon and call the business. Clicking on the address part in the ad simply opens up your Google Maps application and shows the listing information, while selecting Ad title, in this case the business name, takes you to the landing page designated by the advertiser.

One of the first things that popped into my head after I thought through this was that the iPhone picks out phone numbers on the page and makes them clickable automatically. Well, Google got around that by doing some clever CSS coding, I believe.  Check out this screenshot of another ad for the same search:

They coded it so that the iPhone can’t scan that ad text and make phone numbers clickable. As you can see, there is an 866 number in the Hotels.com ad, yet you can’t click on the ad.  Nor can you copy the phone number inside the ad, by holding your finger down and pressing the copy button as you see below:

It only allows you to copy the whole <div>;the only text copied is “Hotels in Corona” and “Sponsored Links,” so there is no way to copy a phone number to paste into a dialer and/or email without Google getting paid for a click. Clever.

This is one of the simplest, yet most clever innovations I have seen in Local Ads by Google.  They eliminate extra costs and confusion on the SMB’s end caused by using tracking numbers. They also do not have to go through the  process of adding call metrics to analytics up-front; instead, they can release that part at a later point while getting this new ad unit off the ground. You get all this added functionality, without adding many more steps in the ad creation process. Cheers to Google!

P.S. I will be blogging a lot more in 2010 I promise

You might be asking “Why the heck would Facebook want to attract local advertisers?” The answer is simple: user experience. Not only do users not want to see ads like the ones you see below, but in the conversations I’ve had with people at Facebook, they don’t even like them.

Besides the fact that Facebook is trying to tell me I need to workout and go get my teeth whitened, it isn’t relevant, and therefore I can guarantee that they have poor click through rate. I don’t know about you, but the last time I checked poor click through rate and lousy user experience doesn’t usually equate to great revenue. So what should Facebook do? The answer is simple, make it easier for local advertisers and search marketers to target relevant users.

Data is King

Over the last couple months we have heard many different ideas on how Twitter can successfully monetize their surge in popularity, growing user base, and overall traffic. The ideas range from charging for an account, charging for premium accounts, simply adding AdSense, and the list goes on. What we haven’t heard is how Twitter could add local search into their business model, monetize it successfully, and create more user generated content.

When you think about it almost everything that is on Twitter is inherently local. The simple question “What are you doing?” implies that because, unless you are at home watching TV, you are doing something that is local, whether that is local to you or to someone else. The obvious example of this is when you go out to a restaurant and write about that on Twitter, whether you say “Going out to [insert name here] with @stevemcstud” or “Just had a great dinner with @stevemcstud at [insert name here]“. If you simply perform a search on Twitter for “restaurant in”, the point being to see how many people tweet “I am going to restaurant in [insert city]” or “Anybody know of a good restaurant in [insert city name]?” you can see that with just that one phrasing there are tons of results of people talking about local restaurants.

With restaurants being one of the biggest categories in local search as far as traffic and advertisers, it would be easy to roll out a beta test for this to justify whether local would work for Twitter or no. So how do I propose Twitter take advantage of this? Create Business Twitter pages. Just like Facebook, where the page does not have as much functionality as a real Facebook but simply serves the purpose of people being able to connect and talk about a subject. Twitter can simply buy the data of all the restaurants in San Franscico and publish them with static pages so that people can actually say “I just ate @lunchbox with @stevemcstud and it was great!” instead of actual tweets like this:

@dudeman718 could of actually told @SoulPSuperstar where he went rather than a “sushi restaurant in Maple Shade, NJ” and they could of actually clicked on @[restaurant name] and gone and looked at a Business Twitter page. What would a Business Twitter page look like you might say. Like this:

Traffic
With this type of page it requires absolutely no action by the restaurant owner or anyone at the restaurant. Twitter would easily be able to kill it in the SERPs if they structured the business pages into a well done SEO friendly directory which would help users find restaurants in their city. Sooner rather than later you would see twitter showing up for searches like “Restaurants in San Francisco” with all that link juice and fresh content it is no question. This would drive an amazing amount of traffic to Twitter, my guess would be about 4-6 million more visits via search engine traffic with this fully deployed.

Small Business Accounts

Besides the new traffic this would allow business owners who don’t know about Twitter to sign up for it. Business owners always at some point perform vanity searches for their business name, in which Twitter would show up in the results in Google and then they would sign up after seeing all the reviews people are writing about their business. Twitter then could charge for business accounts and then monetize the business account that are not claimed by featuring claimed businesses on other related business accounts that are not claimed, something like a “You Might Also Like” type feature.

User Experience and Advertising
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By implementing this you get a huge double benefit. You get to charge businesses for accounts which would generate revenue. Then you also get to rank the directory by Twitter buzz, allow users to tell other users what they are doing more accurately and with less characters, and create more user generated content overall. With people doing nothing but saying what is on there mind on Twitter, they can easily pass Yelp! as far as content is concerned while keeping their original model as a web app intact and not selling out but rather adding a needed feature, the website.

Partnerships
Partnerships will come flooding in with the likes of Superpages.com, City Search, and others. Twitter will not have to complicate their business with a sales force, but just partner with the giants in the local industry who already have the customers, their credit cards, and revenue coming from what exactly small businesses want, more customers. With traffic coming in from local searches, reviews, and buzz, companies with have to partner with Twitter just to keep up with the industry.

It’s All Bout The Dolla Bills
So how much money can this actually bring to Twitter? The current valuation has Twitter worth about $250,000,000, last time I checked, and that was based solely on the buzz and the amount of users they have on the site. With an estimated 6,000,000 visits a month coming from this program and a majority of them will no doubt be recovery searches (people or business owners searching for business names, phone numbers, addresses etc.) this will get Twitter in the public eye to consumers and businesses owners doing vanity searches. There is no doubt that a percentage of those new visits will end up signing up for the service.

With the current valuations, the actual worth of each Twitter user is debated to be between $73 and $42, so let’s just say $40 to be safe. If only 2% of my estimated 6,000,000 new hits per month actually sign up for the service that will total 120,000 new users every month. So what is 120,000 users worth at the current valuation? $4,800,000. And that number grows every month with new sign ups and new visits. Now I realize that not every single one of the 6,000,000 visits every month will be brand new every time, but without a doubt from my experience of working with Local Search Destination Sites the majority of them will be.

The number above does not even take into account the monthly residual they could make from small businesses that they sign up through partnerships. From pure revenue stand point they can easily get 50,000 small business clients spending $6 per month. So let’s assume that they have a 50/50 revenue split. They receive $150,000 per month and growing residual income from partnerships. Now if we apply the math we did above with each user worth $40 then these 50,000 new paying customers add a value of $2,000,000 to the company as well.

Conclusion
All and all this is what you get:

• A better user experience where you will see tweets like “Just had lunch @LunchBox with @SteveMcStud” rather than “Just had lunch with @SteveMcstud at that one cafe at Google next to the main campus”
• They will increase there traffic generated by search engines by at least 4-6 million per month.
• Business owners will find there pre-made Twitter accounts, take them over, and interact with the Twitter community
• Partnerships will follow with companies that already have the very businesses that people on Twitter are talking about actually paying them money. No sales force required.
• Revenue. You actually have a profitable revenue source that may not be the end all be all model, but will be a huge chuck of revenue that does not interrupt the user experience but actually makes it better.
• A big increase in valuation due to increased revenue, increased user base, and increased market share.

So that is my 2 cents. For all I know I could be completely wrong. Oh yeah, by the way, in the hour it took me to finish this article there have been 65 more people who had “restaurant in” in their tweets.