The Role of Directories in the New Local Ecosystem | Street Fight

The Role of Directories in the New Local Ecosystem

The Role of Directories in the New Local Ecosystem

As Street Fight has previously reported, Yahoo CEO Marissa Mayer announced in her first earnings call on Monday that Yahoo would be moving its focus away from local search. She didn’t say the company would shutter its offerings, but she did say local is “probably not an area where we’re going to invest heavily moving forward.” Historically, of course, Yahoo is one of the giants in the space, so the announcement is sure to have a ripple effect. On the other hand, the company’s struggles, its relative inattention of late to its local products, and its ceding of search to Bing back in 2009 all add up to less of a surprise than this might otherwise have been. Indeed, it’s likely a smart move for Yahoo.

Still, Mayer’s announcement, along with some other significant factors in the developing local ecosystem, does call into question the continued viability of a robust marketplace of local directory and search sites. Here are a few harbingers of a potentially more consolidated future.

The Cost of Being a Contender. This is Mayer’s main rationale behind the freezing of Yahoo’s local efforts. On Monday she said:

In terms of the question around local, it is something I’ve spent a lot of time working on and I really do love and I’m very compelled by. With that said, I also have a deep respect for it, but it’s very hard to do it well. It requires a deep investment, a lot of people, a lot of energy and time to build terrific listings. […] I think it’s hard to take that next step to provide even deeper functionality.

Of course, as one of the architects of Google Maps, Mayer is speaking from deep experience about the immense amount of money, effort, and technical know-how it takes to build and maintain a world-class local directory. Still, Mayer’s comments lead one to believe that Yahoo, one of the most visible local properties on the web, now believes local directory building can really only be done well by a very short list of big players. Perhaps the only companies sufficiently capitalized and motivated to compete head to head with Google are Apple and Microsoft. Should everyone else just pack up their toys and go home?

Default Providers in Mobile. Mobile operating systems come standard today with one search service or another. Of course, for basic search that usually means Google, although Kindle Fire currently ships with Bing as the default provider. Bing will also feature heavily, of course, in the new Windows 8. There is no direct correlation between basic search and local search when it comes to default providers, but certainly whatever ships standard will be used by the majority of consumers, and today that means Google Maps or Apple Maps. Again, Windows 8 might open up the field to include a third player, but that still leaves a lot of second-tier apps and services scrambling for a smaller opt-in share of the market.

Penguin and the Rise of Relevance. As I discussed in last week’s column, Google is clearly on a path toward reinventing the concept of relevance in search, and for this reason duplicated content has been punished elsewhere. Multiple instances of the same business listing content on different sites would seem to fit the definition of duplicate content. Does this signal an eventual downgrading of value for local directories?

User-driven sites and apps grow from the ground up in a manner that is diametrically opposed to conquering the world and then refining downward.

I’m playing my own devil’s advocate here because in fact, I think it’s pretty clear that the directory space is likely to remain healthy and diverse for some time. It won’t be easy to stay in step — local search companies need to innovate furiously in order to keep up with the great mobile shift and other technological and cultural advances. But there are a lot of reasons for local directory players to remain optimistic. Here’s how I’d answer my own challenges:

Sometimes Home-Grown Beats World Class. As I’ve discussed previously, measuring local on the worldwide scale of Google Maps is not necessarily appropriate for all types of offerings. Think of Yelp, which built itself up one reviewer and one city at a time, or Waze and OpenStreetMap, which also depend on the participation of communities of users to build value. User-driven sites and apps grow from the ground up in a manner that is diametrically opposed to conquering the world and then refining downward. Many directories specializing in a user-driven niche have been critical to the growth of the bigger local offerings. Yelp reviews in particular augmented Google Places content in the past and are doing the same today for Apple Maps.

Nobody Likes a Monoculture. As mobile operating systems continue to evolve, they will very likely move beyond the notion of default search providers, default local apps, and indeed default anything. With mobile, we’re more or less in the equivalent of Internet Explorer days for desktop, before Firefox broke the mold and Chrome finished the job. Sure, we can expect Google to dominate search and maps as it does today, but the ease of reaching for your favorite alternative is only likely to increase with time.

Some Kinds of Duplication Are Positive. This is an important point worth clearing up. Yes, it’s true that low-quality duplicate content has taken a hit with the recent Penguin updates, to the point that many SEO experts no longer recommend submitting your site to old-style link directories. But business directories are a different animal entirely. Google and other search engines in fact depend heavily on citations of your business on third-party directories and other sites as votes for the accuracy and relevance of their local search results. Given the continued importance of citations, Google is highly unlikely to categorize directory listings as duplicate content.

And here’s one more reason for good measure:

What We Call “Google” or “Apple” Data Is Really a Compilation. Google, Apple, and all other local search directories, even directories like YP.com, Superpages, and DexKnows that have historic links to the big telco companies, source data from third party sites like Yelp and OpenStreetMap and from data aggregators like Acxiom, Factual, Localeze, and Infogroup. Each site uses a different mix but nobody’s got the market cornered on local listings data — instead, companies add value by the quality of their compilation efforts, the number of complementary and corroborating sources, the addition of distinctive UI features, and so on. So the space is inherently more open to competition than it might appear. Sure, few companies have sheer resources on the order of Google and Apple, but smart, nimble startups can take comfort in the fact that those guys started in garages, too.

Damian Rollison is VP of Product and Technology at Universal Business Listing, a company dedicated to promoting online visibility for local businesses. Damian holds degrees from UC Berkeley and the University of Virginia, where he worked at the Institute for Advanced Technology in the Humanities. You can connect with him on Twitter.

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