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Thursday, February 03, 2005

Local Search: Advantage, Google

Starting today, Google has begun making all Google Search users aware of the Google Local offering by putting a link to it on the Google Search homepage, with a red "new" notation. This will lead, in my view, to rapid user uptake of local search; perhaps more rapid than many of us expected.

In the November issue of Page Zero Advisor, I published a jokey "Hypothetical Tell-All Q&A" with an imaginary Googler. Although the tone was lighthearted, the intent was serious. One of the topics I covered with this pretend person was local search. I've reproduced the excerpt below.

(In real life, Google's Sukhinder Singh has been kind enough to discuss the future of Google Local with me, though of course leaving out many specifics. Like a number of other Google execs, she quietly occupies one of the most influential positions in any business of any type.)

--

Q. Google Local. That's going to be a go-slow thing like Froogle, isn't it?

A. Incorrect. Google Local is a top priority for 2005. In fact, you can already see how good it's getting. Check it out at http://local.google.com - or http://local.google.ca for Canada.

Q. But how can I make money with it?

A. Let's say you run a beauty salon in Minneapolis. The first thing you could be doing is targeting by IP (using AdWords, bidding on terms like "hair salon," and enabling those ads only for surfers who are near Minneapolis). Not many local businesses have figured this one out yet, but all you need is to use a regular AdWords account and to go into the settings to set up a campaign as a regional one. But more importantly, if you do a search for "hair salons" in "Minneapolis, MN" at Google Local proper (at http://local.google.com), you'll see quite an interesting thing taking place there... listings of local salons. Notice the handy maps to local establishments.

Q. Riiighht... but how do I pay to get on there?

A. Good question. Right now you can see that we are showing AdSense-style matching ads on the local search results pages (let us be the first to coin these: LSRP's - catchy huh?), and some "main" listings that are not costing the listed businesses a dime. We're using an algorithm to rank businesses in terms of relevance to the query, but we'll continue to test the manner in which we do that. As you can see, right now, one of the top sites listed on your example query "hair salon" for "Minneapolis, MN" is VIP Hair and Nail Salon. (This may jockey around.) Notice below the listing is "references:" -- it shows that the site is recommended on a site called afrohair.com. Clearly, we are sticking by the premise behind PageRank, that links matter, but we may be testing a lot of advanced ways of making this work to the best advantage of the searcher. Another thing which you may or may not see on that page of -- we just love to type this -- LSRP's, is a breakdown that says "show only: barbers / salons." You may not see this, and it isn't working perfectly. But rest assured we don't want the search tool to be stupid. It won't be just dumb keyword matching. You might be given category choices and so forth.

So as for additional ways to pay for better exposure, we certainly respect the effort those crusty old yellow pages companies have put in over the years in terms of giving advertisers the opportunity for enhanced listings. We'll be testing various formats. We left some room over on the right-hand side of the page for more ads. Frankly it would really help us out if people would upgrade to 21" monitors.

Q. So does Google plan to crush all comers in the Local Search arena, or will you coexist politely with others?

A. Bingo! We're only human here at Google, and we want to see healthy competition as much as Bill Gates likes Apple to be around making the world a nicer place. We think some of our competitors are as cute and cuddly as Apple, we really do. But sadly, it's market trends that will crush some of our competitors. We just build cool products and hope people use them. We cannot help it if certain companies, like crusty old yellow pages companies, have about 100 years too much experience in this business, which makes them incapable of putting together cool online applications that people love. To be sure, we may partner with certain local listings companies in order to get a head start on this stuff in various international markets, but similar to Microsoft, it's probably along the lines of a "study, embrace, extend, take 20% stake in, study some more, then crush" type strategy. So if you meet us at certain trade shows over coffee, we're not about to say "we really think our competitors suck," but that's what we're thinking. We're pretty sure that they disagree. They think they don't suck. Vive la différence. Roughly translated, that means "see you at the next Kelsey Group conference, old chum!"

Q. So does Yahoo suck, and will you crush them?

A. Nah... they're OK. In some ways they're way ahead of us. We do chuckle at how Yahoo sold all those Google shares about $40 ago, though. Psyched themselves out!

Q. But will users use Google Local? How will you get them to take the initiative to find it?

A. Do chickens cluck? Does Tony Soprano say "fugeddaboudit?" Do users use Google? Fugeddaboutit! We figure the alternative is hunting around the house for the phone book, so we're not too worried. But we will continue to make people aware of it by incorporating some local results into regular Google Search Results Pages (GSRP's) where appropriate. In this way, people will be reminded that Google Local exists. Longer term, the Google experience will be personalized -- more like a portal -- so those local results will be popping up a lot because we'll know who you are. Hmm, now you've really got us worried about Yahoo. That's pretty much what they want to do, too. Which is why -- let's get back to our main point above -- "Google Local is a top priority for 2005." Maybe Goodman's right. Maybe we should start designing the logo for that blimp.

Q. ClickZ says that Jupiter analysts say that national advertisers will dominate local search for the next year or two, while mom and pop local businesses will be very slow to adopt or reap any sort of benefit. True or false?

A. That's because Mom and Pop - hey, even a profitable chain of dental clinics - don't pay Jupiter analysts. Jupiter analysts' comments are directed at their big clients, and should be taken for what they're worth. Fugeddaboutit. We will concede, however, that larger trends threaten some local businesses. But they always have. Search may indeed accelerate the demise of some local businesses, while improving the lot of others.

Posted by Andrew Goodman




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