Virtual Bricks

I noted with interest the announcement by the Google Places program of a new free service whereby Google will send a professional photographer to a small retailers to take interior photos that will appear on their Google business profiles. This is in addition to the well-known Google Street View program which has been photographing the exterior of businesses nationwide for several years now.

 

Google Places also allows the over four million businesses that have claimed their listings to add hours of operation, sales, events and coupons. It's all part of an ambitious effort to create a national yellow pages that will leave legacy yellow pages in the dust, especially since these business profiles are physical web pages that also appear in the main Google search index and in the opinion of some, float to the top of search results pages suspiciously often.

This is enormously threatening to the big yellow pages publishers. With enough traction, Google could start to charge a modest amount for these listings and in my view could end up the nation's largest (and perhaps only) yellow pages publisher.

That's all very interesting and significant, but I think there is an even more fascinating evolution afoot. A whole host of companies are trying to put small business inventory data online (look at companies like milo.com and of course Google has a toe in the water here as well). Hook real-time inventory to a retailer's website, add e-commerce functionality, and presto whammo, that little retailer starts to sport many of the advantages of purely online retailers. The local business arguably holds an edge though, because it can make a local delivery faster than a pure online retailer, and customers can even pick up items if they prefer.

Not to be outdone however, pure online retailers are now moving into same-day delivery. You may recall the announcement by Amazon last year of its Local Express Delivery option that provides same-day delivery in selected major cities. Now a start-up in the U.K. called Shutl has launched a service that seamlessly links local retailers with courier services that will deliver merchandise to customers in 60-90 minutes.

These are just a few examples of how the business of retail is being revolutionized, and all this transformation creates opportunities. Google is chasing this market from a number of different angles, including a play to become a true national yellow pages. But there's room for smaller players as well. Shutl, for example, is not a courier company. It makes arrangements with courier services, databases their rates and coverage areas, and serves as a sophisticated matchmaker between retailers and these delivery services. Milo is a huge database that matches sellers with buyers at the product level. It's all about making the buying process faster and more efficient, and nobody knows organizing markets and uniting buyers and sellers like data publishers.

Power to the Platform

I will be the first to admit I haven’t paid much attention to Facebook. Frankly, while I have a Facebook page or wall or whatever, I don’t really know what to make of it or what to do with it. But then again, Facebook wasn’t built for me. I got dragged onto it by business acquaintances, added a few more along the way, and now I have the pleasure of viewing vacation photos and the like of people I really don’t know all that well. It’s all quite odd, but the blurring of our personal and professional lives is a rich topic that deserves a separate post.

What really caught my attention over the last few days is all the buzz surrounding F8, the annual Facebook developers conference. Whatever Facebook is, it is big and its ambitions are bigger.

The whole key to Facebook is its growth. With over 400 million active users, Facebook by some accounts now drives as much traffic as Google. But Facebook has long had ambitions to be more than just a website. To that end, it developed an Application Programming Interface (API) that lets other websites easily integrate with Facebook. Using the API, website owners can collect information on visitors to their sites who have Facebook pages, push content to friends of that Facebook-registered visitor, and show the visitor what pages on their sites have been recommended by their friends. There’s lots of twists and turns to this, but the bottom line is that Facebook not only knows a lot about you, it knows who your friends are, and it knows about many of the websites you visit and many of the websites your friends visit. In short, Facebook has morphed from a website to a platform.

Yes, all that information gives Facebook a remarkable capability to target advertising, and the data it generates on individuals is immensely valuable. But opportunities such as those seem positively tame compared to where Facebook is poised to go.

Facebook could become a Google-killer. With so much knowledge about what you like and your friends like, it’s uniquely positioned to refine web search results in a way that hasn’t been possible before. Consider this mind-blowing thought expressed at F8: social connections are the new hyperlinks. Just ponder that a bit; it’s profound.

Facebook not only has a huge user database; it’s incredibly current too. If you are into Facebook, there are powerful incentives to keep your information current, giving it reference database qualities.

With its hooks into other websites and its huge user base, Facebook is poised to get involved in e-commerce transactions in any number of ways.

Facebook also lets its users endorse third party content and sites, giving it a growing role as kingmaker in an online environment where traffic is the currency of the realm.

In short, Facebook is poised to become a central switching center for the web, with vast amounts of highly valuable information flowing through it. It’s not there yet, but few would argue that it is exquisitely positioned to achieve this audacious goal.

While Facebook may be the biggest platform play ever, there’s also an insight here for data publishers, many of whom have the potential to launch platforms for their own vertical markets. Capitalize on your central, trusted market position. Build a platform that addresses needs in your market. Make that platform easy and free for others to hook into, and you’re off to the races. Tap the power of the platform.

Guided Buying

We all know what a buying guide is — information on vendors,

vendors, arranged by category, to help buyers quickly and easily source products and services. The utility is clear and well-established. Buying guides are having a bit of bumpy ride right now as search engines are increasingly able to yield “good enough” results, but regardless of the means of discovery, the need for buyers to find sellers will never go away. What’s interesting is that while the buying guide model has been around for over a hundred years, it hasn’t significantly evolved. Granted, buying guides are more comprehensive and granular than ever before, but the model has not changed.

You may recall in the early days of the web it was widely predicted that we would soon have “automated agents” endlessly scouring the web on our behalf to find specific merchandise at specific prices. It was a concept right out of an episode of the Jetsons that never went anywhere … but this may be changing.

I spent some time looking at a company called Next Jump. It’s in the news today with a deal with MasterCard to create a consumer shopping portal, but that’s only part of the story. Next Jump is a data-driven technology play that connects buyers and sellers in a fascinating way.

First, Next Jump hooks up with online rewards and discounts programs, often operated by corporations. It picks up employee/participant data as part of these deals. With names and addresses, I have no doubt there are demographic overlays involved as well. For credit card company rewards sites, it picks up credit card transaction data. Then it asks users of these sites to volunteer their interests and price points.

Second, Next Jump goes to retailers and says “give us products you want to move, price them attractively, and we’ll micro-target promotions to this network of buyers.” Next Jump promotes the products to the customers most likely to buy. Not surprisingly, conversion rates are through the roof. Even better, there is no list exhaustion and no spam concerns. With each promotion, Next Jump further refines buyer interest and intent.

Yes, at some level you can say this is conventional online marketing with better targeting. True … to a point. But because buyers have expressed specific interest and because Next Jump then adds purchase propensity into the mix, there’s something much more important going on here. I see buyers expressing specific needs/interests. I see the intermediary returning a carefully selected list of matching offers. Isn’t that functionally a buying guide? Or to use my freshly coined term, “guided buying?”

B2B applications? Why not? What an intriguing way for a company to procure office supplies, semiconductors or almost any other type of merchandise. This could be a peek at the buying guides of the future, and a solid first step to those automated agents we were all promised way back when. Best of all, however this evolves, it’s clearly a data-driven business with a clear role for a neutral intermediary.

Be the Center of Your Universe

What caught my eye about the recent press release from Placecast is that it is offering access to its giant database of geographic locations, positioning itself as the central reference standard. The need is specialized, but it’s big and real: locations can go by a lot of different names. What you call 123 East 45^th Street, someone else might call 600 Fifth Avenue, and they’d both be right. Still another might call it “The Acme Building” and they would also be correct. These subtleties matter a lot when your business is about giving out directions or trying to determine if certain individuals are nearby.

But Placecast  is more than just a database being licensed to third parties. It  has also created cross-walks to all the other major location identification systems, making it possible to translate and normalize between systems. Even more interesting Placecast is encouraging content owners to contribute their location data in exchange for getting update location data in return.

Okay, as I said, it’s a specialized concept, which makes it hard to explain. But there’s a larger point that is easy to explain: chances are, the vertical market in which you operate has need for a standard reference database, whether of companies, people, products … whatever. The idea is that by leveraging your existing industry dataset (likely to already be one of the most complete in your industry), you can build a master data file for your industry that has almost endless applications. That’s because while most businesses rely on data to do business, they’re not very good at maintaining data. This makes them willing … often happy … to let a third party do it for them.

Too hard you say? Placecast is soliciting data “contributions” from others to build and maintain its database. Great idea. There are already reference databases in your industry? Placecast builds cross-references between them, creating another level of value.

What’s really great about being the central reference database for your industry is that you embed yourself deeply into critical systems of a large number of companies. Yup, infocommerce at its best.

Yelp: A Review

Yelp, the local business review site, continues to fascinate me. As I previously noted, Yelp is being sued for alleged extortion by a number of small businesses that claim they were told that negative reviews about their businesses could be hidden or removed if they advertised.

Where Yelp has gone wrong is that by adopting a pro-consumer stance, it feels it must inherently be anti-business as well. They are not the same thing. Not letting businesses rebut and correct reviews will ultimately kill Yelp because there are no checks and balances. Consumers aren't uniformly noble any more than businesses are uniformly evil. The notion that if you have enough reviews of a business the truth will ultimately shine through is a convenient but flawed notion. Sheer volume can obscure the truth. And how do individuals weigh and reconcile wildly opposing comments posted by strangers?

What I think we're quickly evolving to is a "Reviews 2.0" environment. The volume-driven free-for-alls that characterized the early review sites will fall out of favor. What we'll see is quantity losing out in favor of quality. Reviews will be limited to those willing to identify themselves and/or those who can prove they bought the product or visited the business being reviewed. Professionals will favor reviews by other professionals. We may even see publishers curating reviews, removing the clutter of reviews that offer little insight or information value. These are all checks and balances that recognize the importance of reviews while simultaneously improving their value. Letting the reviewed party have some input isn't selling out. Done properly, it adds value by raising the level of discourse.

Yelp desperately needs to start thinking "Reviews 2.0," because vilifying small businesses and allowing strangers to trash them without recourse while simultaneously asking them for money just isn't a viable business model. At least that's my review.