TorStar Goes With LiveDeal for Local Auctions

For a short time, eBay experimented with a Local Trading unit, which specialized in autos, sofas and other things “too heavy to ship.” But in 2001, it closed down the unit, which didn’t fit into its plans for eBay Autos, greater transaction fees, etc. By doing so, eBay took the chance that it would be left vulnerable to competitors filling the void.

Sure enough, jump to 2005, and a flurry of companies are ready to take advantage of the increasingly clear relationship between local auctions, classifieds and transactions. One of them is Santa Clara-based LiveDeal.

Launched by a former eBay engineer in 2003, the 25-person company lists 200,000 items for sale every day, and gets about 500,000 unique viewers a month. LiveDeal’s big news this month is that it has landed $4.8 million in financing, including $3 million from TorStar, the progressive publisher of The Toronto Star and dozens of smaller community and daily papers in Ontario. Other investors in this round include Draper Richards, a VC firm, and individual Silicon Valley investors.

We had the opportunity to talk with Vice President of Development Steve Harmon about the company’s progress. Details from the conversation, and more background, continues below.

Cox Search Launches Kudzu

Cox Enterprises has been largely silent on the local front since the high profile failure of Cox Interactive Media and its city guides in 2001. But the local media giant is quietly re-entering the local waters with the creation of a new “Cox Search LLC” division, described as “a strategy and development group created to develop interactive products.”

Cox Search’s first product is an Internet Yellow Pages/social network named “Kudzu,” after the invasive vine spreading over the southeast. Kudzu was set in motion in October 2003 and formally launched in August 2005, after months of delays. Kudzu’s pilot is set in Atlanta, Cox’s home base, and covers the entire Atlanta metropolitan area, rather than just focusing on the urban center, as Craig’s List tends to do.

A quick look at the site reveals a full-featured, highly searchable product, with 100,000 + local service listings and more than 13,000 user reviews (some motivated by the promise of a $10 gas card in return for 10 reviews). Like a good IYP, users can search by keyword or category, as well by distance or review. The site also features a number of “how to choose” guides.

We had an email exchange with Cox Search Vice President and General Manager Tom Bates. Highlights of the exchange, and additional background, are below.

Insider Pages Bets It All on Pay-Per-Call

InsiderPages, IdeaLabs’ women-oriented social network that collects user-generated reviews for local businesses, says it now has “thousands of pay-per-call advertisers” and “is probably the biggest” pay-per- call network.

In an interview with The Local Onliner, Vice President of Product Andrew Shotland, wouldn’t comment on rumors that the company is in talks to be acquired , but he happily chimes in that the company would be “an interesting fit with a lot of companies.”

He notes that the company already licenses its 350,000 + reviews – including more than 5,000 reviews in each of the Top 30 markets – to one of the biggest Internet brands, and several others. Although Shotland would not reveal names, citing contractual reasons, he notes that “our reviews pop up all over the place.”

Jupiter Forecast: Local $ Grows, But Disappoints

Local advertisers have discovered the Internet and will boost their advertising 26 percent to reach $3.2 billion this year. But after that, they’ll grow just 11 percent per year through 2010, reaching $5.3 billion, according to a new Jupiter Research report, “US Local Online Advertising Forecast, 2005 to 2010.”

According to Jupiter’s analysts, local advertising will fall short in its transition to the Net, as most local businesses will be slow to jump online. Instead, local online advertising will remain centered on national firms targeting on a localized basis.

Why? The portals won’t invest in local sales forces, and existing local advertisers see better leads coming from word of mouth, magazines, trade shows and other offline marketing tactics. “They are just beginning to build databases of email addresses,” notes Jupiter.

Kelsey Show Review: YP Brands Can’t Compete

The Kelsey Group’s Directory Driven Commerce conference in Denver Sept. 27-29 saw Yellow Pages executives accepting that they’ll never have the brand power of a Google or a Yahoo. “The cat’s out of the bag,” said Dex CEO George Burnett. “We’ll never have the brand of the portals.”

Burnett could have gone further. He could have noted that Yellow Pages aren’t effectively reaching key demographic groups, have failed to prove that their Internet efforts have separate value; and suffer from a 20 percent decline in overall listings due to unlisted cellphone and VoIP numbers. More critically, they are barely enhancing their deep business profiles, which has been their unique advantage over the portals.

But Burnett and his Yellow Pages colleagues think differently. They tend to focus on their genuine success in keeping revenues up, even as usage has demonstrably gone down. Only by merging print lookups with IYP searches does the industry’s usage show growth.

Will Google Buy Yellow Book?

Yellow Book has clawed its way to a prominent role in the Yellow Pages industry, and has grabbed 50 percent of the market for Independent Yellow Pages publishers. Now it is rumored to be in takeover talks with Google.

Would Google go for it? To be sure, Yellow Book is compelling in a number of ways. It has a national footprint, increasing market share, strong leadership, a scrappy, non-union sales force – and hardly any preconceived Internet strategies.
Google could certainly leverage Yellow Book’s sales force. It is conceivable that the search company may soon hit a plateau with the number of advertisers willing to self-provision their own ads over the Web. Yellow Book’s feet-on-the- street would conceivably boost penetration, while upselling advertisers on a number of fronts.

Yellow Book CEO Joe Walsh is happy to fan the flames of such rumors. Speaking at Kelsey’s Directory Driven Commerce conference in Denver, Walsh noted that “in a lot of ways, a good Yellow Pages business complements a geo- and- search business. I’d be shocked if you don’t see partnerships happening. It just makes so much sense.”