"Yeah, We're Online"

It's remarkable to me that, at this late date, a meaningful number of publishers continue to jeopardize their futures with a less-than-total commitment to developing Web-based product offerings.Too often, I hear from publishers, "yeah, we're on the Web," delivered with vocal inflection that makes it clear the Web is viewed as some annoying new obligation, instead of the future of their businesses.

Of course, when you view something as an annoying obligation, you do what's required of you as quickly and as cheaply as possible.

Not surprisingly, this attitude reflects in the finished product. More than once, I've been told by programmers that they have been handed databases with no more in the way of instructions than "make it searchable on the Web."

Recently, I was presented with a user name and password by a publisher who wanted me to review his site. I went to the site, clicked "login," and was presented with a lengthy new user sign-up form. Not seeing any other options, I filled out the form, included the supplied user name and password. The system immediately rejected them, telling me they were "already in use." After much experimentation, I determined that while the site requires passwords, validates them and tracks them, there was no way to use them more than once. Returning users had to re-register from scratch and think up new user names and passwords every time!

Another site I reviewed gave new meaning to the term "keyword searching." I dutifully typed my keyword into the search box, and the system took me immediately to a document that was over 100 pages long, and left me there to, well ... search for my keyword ... as no highlighting was supplied.

In another remarkably crude search application, I entered a search term and got back 14,000 results. I was impressed until I realized the the site was returning unfiltered Google search results. Yes, this publisher was effectively offering paid access to someone else's free product.

This isn't a failure of programmers. It is a failure of management that left programmers to develop in a vacuum and let buggy products go live. To their credit, these publishers were aghast when I alerted them to these problems, and moved quickly to correct them. But what was most troubling to me was that in none of these cases had the users of these Web sites voiced any complaints. Why? Probably because they weren't in fact using them. And that's my point. If publishers don't take their own sites seriously enough to access them at least occasionally, they should not be surprised when their customers don't either. The act of simply "being on the Web" is not an achievement. In fact, a poorly-executed Web site is seriously detrimental to your business.

The Fragmentation of Search

The New Year is traditionally a time for predictions, so I will dutifully take my turn. I am only offering one, but it's a big one: in 2006, we will begin to see a meaningful shift in the current GYM (Google, Yahoo, Microsoft) search hegemony.

Am I predicting the implosion or demise of one or more of the big three search engines? Not at all. Instead, I am predicting that the search business will begin to evolve in ways that don't play well to the strengths of the big general search engines and that we will see concrete evidence of this by the end of 2006. I also believe that we're starting to see the big three getting distracted, likely to the detriment of their core search business. Yahoo is increasingly emphasizing content, and has previously de-emphasized search to chase other opportunities. Google, for all its technological prowess and business success, is rapidly enmeshing itself in deals that will distract it, if not alter its very essence (think AOL). And at this late date, Microsoft is still trying to figure out what it wants to be when it grows up. You can never count Microsoft out of the game, but they're clearly running out of time and options if they truly want to be a major player in search.

Perhaps more importantly though, users are raising their expectations with regard to search. It was a huge technological achievement to get so much of the Web under one index, and I never ceased to be amazed by the new search tricks and innovations that are being rolled out on a regular basis. Yet, I believe the game is changing, and what users -- particularly business users -- hunger for now is not the most answers, but the "right" answer. To get to the "right" answer demands sophisticated filtering and true domain expertise, something that simply doesn't fit within the one size fits all framework of the general search engines.

If I am right (and at worst I may be off on my timing), we are going to see two types of search rapidly getting both attention and market traction: vertical search and paid search.

Vertical search is not a new concept, but it's had difficulty gaining mainstream acceptance and momentum, both of which seem imminent. While definitions vary a bit, to me vertical search means presenting a deep, highly filtered and very intelligent entry point into a specific market. Vertical search demands true domain expertise, because you can't filter intelligently unless you truly understand the information needs of a market, and you are experienced and confident enough to vet information sources to present the best as opposed to the most. Vertical search is most likely going to be advertising supported, but don't rule out paid search.

Paid search sounds a bit crazy, with GYM offering so much for free. Of course, people also said cable television would never succeed with broadcast television offering so much for free. I believe the marketplace increasingly wants both deep and dependable sources of information. This is where many of the content aggregators are playing right now, but most are hanging their hats on having the biggest collection of stuff, as opposed to the most comprehensive collection of stuff in a single area.

So while there will continue to be a large role for GYM to meet general and unsophisticated search needs, the future is about specialty search providers leveraging expertise in specific areas to become the search engines of choice for specific audiences. So while we are celebrating New Year's messages of unity in other contexts, in 2006 the data publishing industry should be welcoming -- and profiting from -- fragmentation.

The Local Search Follies

It's officially a gold rush, with everyone now stampeding to mine the allegedly huge dollars to be found in the local search market. Let's not be bothered with whether or not what's being sold is what the market needs -- that would spoil all the fun.

Google and Yahoo now have beta versions of their answers to local search open for inspection. My quick review: they're better than I would have expected, but a long way from what's needed. AskJeeves has partnered with CitySearch so that its local restaurant and nightclub listings will appear prominently in applicable search results. In the yellow pages area, FindWhat has announced that Canada' s Yellow Pages Group will be grafting FindWhat pay per click auction technology onto its site, perhaps more evidence of a mini-trend in this area. Every other yellow pages publisher is out with their own local search initiatives, all fervently hoping that local retailers will deliver the online riches that have eluded them to date.

As Janice McCallum of Shore Communications points out, local newspapers are the group best positioned to benefit from local search, but they continue to sit around as more nimble competitors rip the guts out of their businesses. Just as newspapers saw their classified advertising business decimated, local search may ultimately start to cut into newspaper display advertising, which might finally spur them into some sort of coherent reaction. Newspapers have always jealously watched the yellow page business. Indeed, most major newspapers have at one time or another owned yellow pages publishing companies, only to divest them after concluding they just didn't "get" the directory business. Now with the Internet, there actually would be some great synergies between newspapers and yellow pages, but newspapers still feel burned by their earlier yellow pages experiences.

So who's going to win in the local search game? Here are my predictions:

I agree with Janice McCallum that newspapers are the best positioned to be the winners in local search, but they've got to overcome their own inertia, previous bad experiences with directory publishing, fighting a multi-front war over their classified advertising, and the surprising continued strength of the print yellow pages business, which limits their openings. I just don't see newspapers pulling it off, especially since they need to overcome the biggest obstacle of them all: themselves.

As to the big search engines, I personally believe the cracks are starting to show as they push to be all things to all people. The future of search -- yes you heard it here first -- is two-tier searching, where the big general search engines hand off certain types of searches to specialist search engines/directories/yellow pages.

Local yellow pages publishers have always dreamt of being national yellow pages publishers. The Web let them indulge that dream, and indulge they did. Of course, while these publishers raced to build out national content, they never built out their regional sales forces. Is it any surprise they aren't drowning in ads? For several years, I've been urging yellow pages publishers to play to their local strengths. I'm currently estimating it will take 2-4 years for them to get up enough courage to try, and then they'll be contenders.

Long-shot possibilities? Think about Comcast, or even AOL, both of whom have unique capabilities to target content geographically, and a still significant "home page advantage." Stretch your imagination a little further and you might come up with InterActive Corporation, a powerhouse in local listings with holdings such as Citysearch, TripAdvisor, Evite, ServiceMaster, but seemingly more interested (for now) in the rich transaction revenues generated by its Ticketmaster, Hotels.com and Expedia units.

Bottom line: local search will happen, and it will be big, but it's going to be a big, sloppy, crazy competitive mess for 2-4 years before yellow pages publishers realize they should focus on selling ads where they actually have salesforces. Then we'll have our winner.

Second-Tier Is Not Second-Rate

I want to elaborate on last week's message that we are moving towards two-tier searching, with general search engines "handing off" searches to more specialized search engines and databases.

This prediction is based on my belief that general search engines are not and never can be the single best way to access all information. That's especially true when you don't have access to all information anyway, and the information you do have is highly inconsistent in structure, depth and currency. Layer on top of that the technological limits on full-text searching, and you can start to see why I say this. Interestingly, the hot new search engine start-up of the week, Kozoru, reportedly raised $3 million in venture capital based on the concept of introducing taxonomies into search. This says to me that others are seeing the limits of keyword searching.

The opportunity in second-tier search is to take a specific subject area and cover it deeper and better than a general search engine ever could. This could be expressed as a vertical search engine (take a look at GlobalSpec), a vertical buying guide (look at Hanley-Wood's ebuild.com or Martindale-Hubbell's lawyers.com) or a vertical portal (look at West's findlaw.com). The commonality in all three of these sites is a tight vertical coverage area, proprietary content (if only because the content is stored in such a way that it's invisible to the major search engines), and lots of structure to speed searching and provide precise and consistently presented results.

I suggest that the major search engines will increasingly "hand off" searches to second-tier information sources. That's not to imply that these hand-offs will be free. I suspect second-tier information sources will assume that role through aggressive and expensive pay-per-click programs, and we're already seeing some very expensive exclusivity deals between search engines and specialty buying guides.

This game will get more expensive and competitive before it's over, and the rules of engagement are likely to change over time. Indeed, the general search engines may choose not to explicitly acknowledge that they can't be all things to all people, but this evolution will be hard to stop, because it's logical, natural and the revenue the general search engine might be forgoing is revenue that might never have been theirs anyway.

Is what I am describing the same as what is now being called "vertical search"? Yes and no. Two-tier search includes buying guides and directories, whereas vertical search generally refers to vertical versions of Google. Further, the word "vertical" still sends shivers down many spines, due to such things as vertical portals (ahead of their time) and VerticalNet (out of their minds). Two-tier searching is here already and working quite nicely. What's evolving is the relationship between these specialty search resources and the big general search engines. The better that relationship, the better the prospects for the second-tier search engine.

Search Local, Shop Local

In posts past, I've dissed the newspaper industry for not harnessing the Web to build local buying guides and shopping sites, given what I see are built-in advantages to dominate local search. That's why it was with great anticipation that I went to take a look at ShopLocal.com, the newly announced local shopping site from CrossMedia Services, a company jointly owned by newspaper giants Gannett, Knight-Ridder, and Tribune Company.

Rather than a series of local micro-sites, the newspaper giants are thinking big and have built a national site to drive local shopping. But you quickly get to local offers by entering your city name or zip code on the opening screen. Any indications that the site was affiliated with my local newspaper were conspicuously absent, and there wasn't much in the way of explanatory text to position the site to users or even describe its contents and purpose.

I entered a zip code for Philadelphia and got a search results page split into three sections: categories, stores and brands. The category section of the screen gave me a list of yellow pages-like headings from which I could search. The stores section of the screen lists local stores (currently all national chains, buy hey, they're just getting started), and the brands section showed me a list of national brands. For fun, I clicked on "outdoor playsets," and found three offers: CVS offering not playsets, but rather a storewide discount, and two offers from Home Depot for playsets. Under each item was the option to "add to list," which creates a printable list that consumers can take shopping with them to remember what to buy. Under one Home Depot item was the option to "buy online," which didn't sound much like local shopping to me. I clicked on it and found that I could indeed order my playset online. Why do I already feel that ShopLocal may be missing the point?

The other thing I quickly learned about ShopLocal is that it is focused on special offers. Click on a category and you'll be presented with an eclectic list of whatever the various merchants in the category happen to be featuring at that moment -- sort of a giant electronic yard sale. Maybe you want these things, maybe you don't. The classification taxonomy appears to be a work in progress. Under the general heading of "automotive accessories" were only four sub-categories, one highly specific one for "power inverters," two much more general ones and one for "miscellaneous." It's not fatal, but if the site grows, this could quickly become a mess. What's really surprising is that the site doesn't allow users to print coupons to build involvement and help retailers track response -- it merely generates a simple shopping list.

One thing I liked about ShopLocal is that you can attach your email address to any store, brand or category and receive weekly emails with current specials. That's smart marketing, pushing special offers to targeted consumers, but in a way, the power of this feature really makes the rest of the site seem unnecessary.

What I saw with ShopLocal was a national site, utterly devoid of local personality and in no way leveraging or complementing the local paper. The fact that ShopLocal had no local merchants (at least in Philadelphia) I will attribute to its recent launch. However, this is a trap that's befallen other putative local shopping sites --- bringing on true local merchants is a pain compared to selling the big national chains, so guess what: they don't. So ShopLocal's commitment to local shopping will need to be proven over the next few months.

The press release for ShopLocal notes that its mission is to marry online research to offline shopping, making its many convenient links to online ordering a bit mysterious. The press releases also positions ShopLocal as saving the consumer from having to go to numerous different Web sites to find the best deals. But since ShopLocal only lists sale items, it will be a very long time before it has enough mass to present a real comparative shopping experience to consumers.

Another failed online venture by the newspaper industry? Perhaps not. The most interesting thing about the launch of ShopLocal was the sentence in the press release stating "...in the coming months, we expect to announce additional network partners such as portals, online directories, and other newspaper publishers." Will ShopLocal soon be sporting local yellow pages listings? Maybe the newspapers do get it after all.