YP’s Split and Local.com’s Bankruptcy: Ain’t No Big Deal

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If you are in the local search biz, this week’s news that YP.com is splitting its print digital businesses into different companies and Local Corp’s filing for bankruptcy might strike you as a couple of HUGE events.

Certainly for the employees, managers and partners of these companies, these events are significant. But for the greater local search industry, I don’t see these as particularly big milestones. In fact, I’ll bet you within six months not many people will even recall they occurred.

Let’s start with YP.com‘s split. I don’t know the particulars, but YP’s digital business has likely suffered from the “strategy tax” that came with the need to not trade “print dollars for digital dimes.” Despite this, the digital business appears to have done well in terms of market share.  But when you are faced with competition from Google, Facebook, Yelp, etc. — not to mention the 10,000 start-ups big and small who have been nipping away at some part of your body considerably higher than your ankles — you probably need a lot more focus and firepower. And while having a print offering used to be a great way to upsell local advertisers to digital, now it’s more likely that many advertisers are asking for digital and are having to be sold on print.

So perhaps this YP thing means we are finally at or beyond the point where digital revenue is outpacing print. So YP is thanking print for its years of dedicated service, wishing it well in its inevitable consolidation with other books and moving on. Nothing we didn’t know would happen sooner or later. And I know that print can still be a great business. But like everything else it requires focus. So go focus on it, you print enthusiasts and perhaps you will be printing money while the digerati duke it out.

Meanwhile, Local Corp‘s bankruptcy is another non-event for the industry at large. Their directory and syndication businesses have always been an arbitration play: figure out how to buy traffic as cheaply as possible, sprinkle a little SEO on top to make user acquisition costs even cheaper, optimize those ad network feeds, rinse and repeat. Sure, they had a business selling direct to advertisers, but based on my limited view, this never seemed to be the core of the business.

I recall when I quit my first job at the local butcher shop, my manic-depressive boss, John, said (and I quote): “Stick your hand in a bucket of water and pull it out. As long as there’s a hole in the water, that’s how long I’ll miss you.”

I am not trying to be quite as charming as John about Local’s problems, but the challenge with their business — and YP’s business, if we have to face facts — is there are endless substitutes for what they do. I do wish them well and perhaps the bankruptcy is the best path for the business’ recovery, but their challenge is the same we all face in local.

When people ask me how Local SEO Guide’s business is going, I often say “Great. The fact is that the local market is so huge and fragmented that all you have to do is stick your hand up and eventually business will find its way to you.” The big problems come when you try to hit scale with an undifferentiated product and realize that the fragmentation that worked so well for you when you were small has the opposite effect when you are big.

[Full Disclosure: A few years ago I did SEO consulting for Local.com.]

andrew shotlandAndrew Shotland is proprietor of Local SEO Guide, a leading local search engine optimization blog and consultancy.