Everyone is fighting for better, more cost-efficient way of producing content for Websites. But is the so-called “content mill,” search optimized approach of a Demand Media, Associated Content or Examiner.com the only way to achieve this?

Whether you agree or disagree with the characterization of these companies (we largely disagree), alternatives are out there. One alternative is presented by Helium, a 29 person, Boston-based firm that brings in text articles from 160,000 writers and editors; filters it via peer review to let the best voices rise to the top; and allows media partners to generally choose from multiple entries for the best fit.

Helium was founded in October 2006 and has received $16 million in Series A funding. Most interestingly to us, it is also 20 percent owned by mega publisher RR Donnelly. Indeed, RRD, with 1,200 sales reps, is its principal reseller to local media clients including TV stations, radio stations, newspapers, Yellow Pages and Web pure plays.
Using Helium, media partners can personalize the content for their own purpose.

One TV company we recently talked with said it liked Helium’s approach more than the others because it had confidence in the quality of the articles because they are refereed, and the company is able to let local reporters add their own touch to pieces that run on its websites. It isn’t so much about using outside content as “letting the company’s talent do more,” it said.

This company would be among Helium’s pay-by-the-article customers. The cost can range anywhere from $30-$50 for general interest content, to up to $1,000 for a high end medical specialty piece. There are also monthly plans. The company’s content is also distributed on its own ad-supported website, which receives nine million page views per month, growing five to seven percent month.

CEO Mark Ranali tells us that writers are paid on an algorithm based on a portion of ad revenues. The payment scheme is similar to that of Demand Media, Examiner.com or Associated Content. “Many, many writers receive from $5,000 to $10,000 a year,” he says — enough to be a good source of supplemental income. But that also does not differentiate the company. The difference, he contends, is that the content may be “reviewed better than professionally written material.”

“We are not oblivious to what the search engines are doing,” says Ranali. “You want to be on Google at the end of the day.“ And the other content creators may have been perfectly optimized for Google. But instead of producing articles specifically to top the search engine, Helium is bent on producing the best article. “That’s perfectly aligned with Google,” which really just wants to highlight the best content, he says.

Google’s $700 million acquisition of ITA, a search leader in online flight reservations, doesn’t have a direct impact on local advertising and services. Its immediate impact is on rival metasearch-based travel solutions, especially Orbitz, which gets 40 percent of its revenues from online flight reservations. Expedia and Travelocity are much less dependent on online flight reservations. Online travel agencies will also take a hit.

But the role of metasearch is ultimately very important to the local search space – in part, because it was an area in which vertical specialists could build value in search that was not dependent on Google. This potentially includes everything from events guides (i.e. Zvents) to coupon aggregation (i.e. Yipit) to local classes (i.e. TeachStreet) to autos (i.e. AutoTrader). ITA breaks airline flights down by airline, schedule and price. That type of granularity can be applied across the local spectrum.

Taking it a step further, Metasearch is also the tip of iceberg for the burgeoning lead generation business, as Piper Jaffrey’s Gene Munster points out. So the obvious question for Google (and to Google) is: Will Google use ITA as a foundation for other vertical metasearch activities? For our part, we see it as a natural progression.

In fact, mass transit directions in themselves represent a host of opportunities for local services and advertising (along with parking garage info). Companies engaged in collecting, sorting and leveraging mass transit directions include HopStop, Google Transit and Urban Mapping. Most large public transit agencies have also developed an infrastructure for mass transit and walking directions.

HopStop was the first service out of the gate. The five-year-old, 12-person company is now providing transit and walking directions in 16 metros throughout the U.S. and Europe, and plans rapid expansion in Q3 and Q4.

During HopStop’s early days, its directions weren’t always reliable (note: amassing and normalizing mass transit data is no easy task). These days, however, its directions tend to be very good. A team of us here at BIA/Kelsey recently relied on HopStop-powered directions to get around New York & New Jersey, with excellent results.

Besides mass transit and walking directions, HopStop is also providing information about alternative transportation options, such as car sharing and limo/sedan reservation capability (via partnerships with ConnectByHertz and LimoRes). It also estimates cab fares, which is an especially useful feature.

CEO Joe Meyer, a former eBay and Quigo executive who came on-board last April, says the quality of the service and its scalable routing engine are close to where they need to be. He notes that it has been quite an effort to collect data from hundreds of transit authorities — including, for instance, 30 transit agencies in the New York area alone. The service also enhances and improves the data via a user feedback system, with user improvements coming in via Facebook, Twitter, email and SMS/chat.

Roughly half of HopStop’s traffic comes directly to its site. Other users come in via local media affiliates, who either work directly with the site or use its open API. Not surprisingly, the highest traffic day part comes during regular business hours, with half of the transit queries pertaining to points-of-interest such as local events, restaurants, museums, tourist attractions.

Other searches pertain to business-centric locations such as office buildings and conference centers. Meyer says they are all highly suited for contextual and geo-targeted advertising.

What’s really been evolving rapidly is HopStop’s utility as a mobile service. Over the past two years, HopStop has launched an iPhone app, a WAP site, and advanced test messaging capabilities (Desk-to-to-SMS, and SMS-to-SMS). The company has recently recruited Scott Margolis, the former Director of Mobile for FoxNews.com and FoxBusiness.com, to head-up it’s mobile initiatives.

While desktop directions still account for the majority of usage, smart phone usage is growing at a much faster rate. HopStop now has plans to develop mobile apps for Android, Nokia/Symbian and Blackberry.

In terms of ad revenues, the site provides free listings to local merchants, using a home-grown database as well as one populated by CitySearch. Most of HopStop’s revenue, however, comes from national advertisers, including Starbucks, Dunkin’ Donuts, CitiBank, CapitalOne, Duane Reade, CVS, Monster, CareerBuilder, Delta, JetBlue and The New York Times.

These advertisers typically utilize a mixture of display and text ads, which HopStop’s geo ad-server targets down to a street address level. “It is all about hyperlocal” for such advertisers, says Meyer.

Although HopStop asserts rapid growth, Meyer is upfront about the challenge posed by Google Transit (which is tightly integrated into Google Maps). In his mind, Google Transit is an overly rigid solution. For instance, it only accepts data from transit agencies that conform to its specifications. Conversely, HopStop takes more of an open approach, he says. It accepts scheduling and routing data in every format, giving users many more routing options, as well as more accurate directions.

“It’s a double-edged sword having Google as your primary competitor” says Meyer. He adds that Google’s entrance into local transit navigation validates the need for direction searches, and their commercial viability.

Prior to the filing, doubts have been raised whether ReachLocal’s IPO would see the light of day. While the company’s revenue has been strong, from a typical base of 15,000+ customers, churn rates suffered throughout the industry have raised concern. Google’s recent efforts to cut back on markups charged by third party resellers like ReachLocal hasn’t helped either.

But ReachLocal has been enhancing its appeal to SMBs by broadening its range of paid and organic services in creative and valuable ways. In March, for instance, it purchased SMBLive, a business profile and website service, for $8.5 million.

Already, the aggregator space is well populated by sites such as Topix.net, Outside.in and Everyblock. Other companies challenge from the periphery, including the so-called “content creator” companies (Examiner.com, Demand Media, Associated Content, AOL’s Seed.com). The portals and news services have also been traditional aggregators of content.

San Francisco-based Fwix is another up-and-comer. The 16 month old company hopes to differentiate itself by a highly refined set of algorithms based on “user behavior” and “linguistic quality.”

We met last week in San Francisco with Darian Shirazi, Fwix’s 23 year old founder. Shirazi, who previously was a software engineer at Facebook, notes the company has raised $2.7 million from BlueRun Ventures, and now consists of 12 people – 11 engineers, including two mobile specialists; plus Steve Comfort, a business development vet .

The site attracts 14 million unique users in the U.S., as well as Canada, U.K., Ireland, Australia and New Zealand. It is looking closely at Brazil as a possibility. The site is centered around 200 cities, which will increase to 300 markets by September 2010.

Revenues for the site come largely from paid search, and customized news packages. Fwix is also testing different types of proximity advertising. Eventually, it expects to see a revenue split that consists of 30 percent from ad networks; 20 percent from partners; and half coming from its own sources.

But Shirazi says Fwix is less focused on short-term, nascent forms of monetization. Instead, it focuses on building up its traffic and on its local news search engine, which Shirazi believes is the most advanced local engine to look exclusively at “user behavior” and “linguistic quality.”

Mostly, Fwix is determined to avoid over-emphasizing search engine optimization rankings. It believes an SEO-focus ultimately waters down the quality of local search results. “We are about quality journalism,” says Shirazi, noting that the site’s content comes from a wide range of local media sources. (I found Carlsbadistan.com on Fwix; a site dedicated to my little beach community that I hadn’t seen before). While longterm goals are for the site to get most of its traffic from its own URL, the vast majority of site traffic today comes from partnerships, including, most notably, The New York Times Co. and Weather Underground.

The Times Co. is already using Fwix content to supplement its local news coverage for The Santa Rosa Press-Democrat, which is part of its NY Times Regional Group. The Times Co. will also be using it to supplement coverage for The Local, The New York Times’ hyperlocal sites in the New York area. Shirazi doesn’t confirm that the NYT Co. relationship will go deeper — it could — but says many more partnerships are in the works.

Mobile also plays a significant role in the company’s development. As mentioned above, two of its engineers are specifically focused on mobile features and products, and the company was among the first to launch a dedicated iPad app. It eventually expects mobile to account for both content contributions, and up to half of its site usage. But Shirazi says that mobile currently only accounts for five percent of its overall traffic.

While Shirazi expresses confidence that Fwix can carve out a large chunk of the local aggregation market – and even expand it – he acknowledges there is an 800 lb. guerilla that he is watching carefully. “The one company we are afraid of is Google,” he says. “Their engineering is intent to do what we do.”

Craigslist, Oodle and PennySaver have been among the leaders in online listings. Now add Garage Sales Tracker to the list. Based in Boca Raton, Fla., the start-up provides a full platform for local media companies, including TV stations and community newspapers.

Launched in January 2009, Garage Sales Tracker posts sales locations on an embedded Google Map, and includes useful tips for sellers (“have plenty of single dollar bills on hand”). It also provides related information about local consignment shops, and allows users to filter their search by item or geographic location. Garage Sales Tracker can be white labeled by the media partners

It is also a destination site in its own right, selling ads to related categories, including self storage (U-Store-It) and foreclosure listings (RealtyTrac). We’ve seen other self storage companies on the local media sites. Mortgage brokers are also envisioned.The site also earns revenue from featured listings. Otherwise, listings are free.

Mobile also a significant role in the site’s development. Garage Sales Tracker currently has an iPhone app, which helps garage sale shoppers on-the-go. An Android app is currently in development.

It also comes after accounts from Hitwise and others that Facebook is responsible for more traffic to portals, newspaper sites and even IYPs than Google News (although not Google generally).

On the Clickable blog, CEO David Kidder forms a position that that “search and social advertising are complimentary. On Facebook, advertisers can be out ahead of the market. Every piece of information that a social networking user provides about themselves is an opportunity for marketers to learn about and target their audience: age and gender; college and occupation; hobbies and interests and relationship status,” he says. “These are the raw materials with which to build targeting ‘personas,’ every one a new potential customer.”

Berry, which calls itself “your local leads expert,” was sold to Local Insight Media last year. It is also an authorized reseller for AT&Ti’s Yellowpages.com, so it is essentially going to be splitting its sales products. SMBs will be offered online listings and video advertising from YellowPages.com, and websites and SEO/SEM with Yodle. Berry is also an authorized reseller for Google AdWords.

Yodle CEO Court Cunningham says the deal with Berry, Ma Bell’s legacy sales company, has been “a long time in the making.” Tests began in May last year, and the arrangement is now live in some markets, with “methodical, region-by-region” rollouts likely to be completed by the end of summer. He also notes that Berry now becomes its largest partner, but that Yodle is private labeling solutions with “four or five” other companies as well.

It is hard to focus on just a few learnings, but here are my top takeaways – none of which reflect anyone’s opinion other than my own.
1. “Game mechanics” have proven to be the breakthrough factor for sites such as Groupon and FourSquare. We’ll see game elements added to more and more sites.

2. Small businesses in some categories will hire marketing services to handle their social media obligations because they wouldn’t do it on their own. Pricing and outreach will be key here.

3. Distributed networks are a better model for scaling local content and sales than destination sites in many cases. City Grid from Citysearch is well poised to leverage this.

4. Google is not conspiring to wipe out local publishers and services by highlighting its own profile pages and seven packs. But in Google’s bid to provide super efficient links and more local sales, there is a creeping steerage to its own results. Maybe it needs to establish a publisher’s bill of rights.

5. Location Based Services will become more pervasive and go beyond “fun only” status as sites such as Taxi Magic figure out how to use them for things such as estimating cab fares.

6. Content creation services will successfully deploy huge armies of local/vertical contributors. But these will be largely motivated by self-promotion, rather than pay-by-usage (although everyone likes to be paid). That will be Christmas money. The creation services themselves have enormous potential to populate every kind of site. Content is royalty, if not king.

7. Home and Trade services are now moving to the Web in a major way. ServiceMagic has a major head start, but social features might move the viral needle and give a chunk of the market to new sites such as Alikelist and RedBeacon.

8. AOL may be able to breakthrough in hyperlocal with Patch.com by virtue of a mega budget ($50 million) and scope (hundreds of communities). But it is going to need to maximize search optimization, links from AOL verticals and form top level partnerships with media companies and others.

9. Whole segments of classifieds have gone “free” via Craigslist. But a surfeit of new listings and premium opportunities still await those that successfully target via vertical and add relevant, enhanced features.

A new one for us is Goby.com, a venture-backed firm that comes out of Mike Stonebraker’s relational database studies at MIT. The site, which launched in September 2009, has already had 250,000 visitors. It reviews 300 categories of things to do, from camping to opera. It can be embedded into other sites via Facebook Connect. An iPhone app is coming out “soon.”

The site breaks things up three ways: What would you like to do? Where? and When? It makes a special effort to go beyond “cities with airports next to them.” For instance, the most thorough listing of events in Carlsbad,CA 92009 that I’ve seen.

CEO Mark Watkins, a veteran of vertical search at Endeca, says the site is task- centric and created to be a “search engine for things to do in your free time. It does equally well for people planning a trip or sitting around the dinner table on Friday, wondering what they are going to do this weekend.”

It also approaches events in a way that Google may not. “Google gives answers for general purposes. But it understands keywords, not structured data. Plane tickets and other semantic information are not on Google, he says. “We’re getting very focused results. We can sort Web data by price,” among other things.

The general model for search engines is to have a keyword and give back a URL, says Watkins. But Goby seeks to convert those web pages to real world entities which people can make decisions about. “We’ve cross-referenced photography from across the Web, and integrated more video types, and MP3 from concerts,” he says.

Another focus is to figure out how people decide to go to events. “We want to know: how did you decide to be at that restaurant,” says Watkins. It is the interaction of the search and gaming worlds, building off location-based sites like FourSquare and Gowalla.

Indeed, Watkins emphasizes that Goby.com is not just about events. “Events are really important. But they are one dimension of how we spend free time.” Travel is another aspect. “We’re coming at it like a search engine, as opposed to TripAdvisor,” he says. Travel is surprisingly local oriented and is more complementary to local than is generally realized, notes Watkins. More than half of queries –55 percent — are typically near users.

As for revenue, the site expects to initially receive the lion’s share from affiliate and lead generation fees. It anticipates revenues from sites such as Priceline, and tour providers if it can recommend an Alcatraz tour in San Francisco, for instance. Or its personalization and recommendation engines can promote an Opera performance. When the site gets bigger, it will be more interesting to advertisers, says Watkins.

The site will also have a white label “pro” model for sites that might be licensed by media publishers, or travel suppliers.