Where Are the Local Startups?

Last week I wrote about the dramatic changes wrought by Google in local search over the last several years, which have transformed the company’s Search and Maps platforms into the most sophisticated and useful (though far from error free) local search and navigation system in the world. The other side of that story is the gradual but, by now, total domination of competitors, which has left very few companies standing that are able to provide a viable alternative to Google’s version of local.

Again, a historical perspective reveals a stark contrast. When I started working in local in 2006, the competitive field was wide open. This was before the Great Mobile Shift, and desktop-based Internet Yellow Pages (IYP) sites like Superpages and YP.com were destination sites for millions of consumers looking for a digitized version of the print yellow pages. A plethora of digital-first local sites offered different spins on a digitized business directory, from Citysearch (reviews) to Mapquest (navigation) to Merchant Circle (B2B networking). And that’s just a few examples. Who remembers DexKnows, MojoPages, Local.com, YellowBot, Kudzu, Insider Pages, Judy’s Book, or Magic Yellow? I could list a dozen others.

Those that survived did so by pivoting away from direct competition with Google for consumer traffic and toward specialized offerings. DexKnows and YP.com merged in 2017 to form Thryv, now a successful SMB marketing platform. Many sites were not so lucky.

Enter the Great Mobile Shift of 2015. Heading into this transition, Google Maps had already taken a lead position among smartphone-first consumers. Native mobile platforms like Foursquare, launched in 2009 in the early days of the iPhone, were able for a time to offer a viable alternative to Google, again through differentiation, with Foursquare famously inventing the game of checking in at popular local spots (alongside forgotten competitor Gowalla). Popular desktop platforms like Mapquest launched mobile apps that offered a degree of competition to Google, but Google gradually outpaced its mobile competitors just as it had done on desktop.

In our current moment, it’s fair to say that Google has vanquished the competition, with the exception of important secondary players like Yelp, Apple Maps, and Bing, whose influence is not insignificant but is also unlikely to grow.

Will Google forever dominate local?

However, many factors suggest that Google’s dominance may eventually erode, making way for new innovation. The first is the alternative search movement, led by DuckDuckGo and populated by so many competitors that Search Engine Journal was recently able to list 20 viable alternatives to Google. Just this month, Ahrefs entered the search field with a site called Yep, which reportedly cost the company $60 million to build. Such investments are made because of the significant revenue behind even small slices of the search market.

Consumers are choosing alternate search engines due to privacy concerns (DuckDuckGo, Startpage, and now Yep) or to align their search habits with causes they care about. The latter category includes Ecosia, a search engine based in Germany that donates all ad revenue towards planting trees; OceanHero, an engine powered by Bing that contributes to ocean cleanup efforts; and Everyclick, a U.K.-based search company that gives half its revenue to charitable causes.

Alternative search may represent a minority of search traffic today, and Google is currently secure in its dominant position, owning 92% of the global search market. But as we’ve seen with social media, habits change with time, as younger demographics establish new attachments to platforms that speak to them, rejecting the affinities of their parents. One imagines that, just as Snapchat and TikTok disrupted social, successfully casting Facebook as an uncool dinosaur, so too might a search innovator catch fire with an approach we have not anticipated. Already there are some indications of age differentiation in search behavior that innovators might leverage; for instance, voice search is significantly more popular in younger demographics.

Perhaps Google’s own strong push to make search more visual will show the way for some startup to build a visual-first search engine. Or perhaps the coming metaverse, whose advent is being actively supported not only by Meta but by Google and Apple, will establish a new context for search beyond the screen.

The numerous antitrust actions that Google and other big tech companies are currently faced with in Europe and the U.S. also have their role to play. Antitrust actions are slow to reach fruition, and some of them will surely fail to achieve their objectives, but given their sheer number, it seems inevitable that some degree of regulation will eventually force Google to provide space on its platforms for alternative services.

According to the account I’ve been offering, search competitors gain ground over time due to changing regulations or demographic trends, opening a space for new ways of thinking about local as a subset of general search. But that’s only one path. Local search was more of a standalone proposition in the days of directory sites and check-in apps, and that angle may become viable in a new era. Though Google’s sophistication in local is unparalleled, any local SEO will tell you that its local platform is rife with problems, from spam listings to fake reviews to inadvertent suspensions and rogue user edits. Google’s local offerings provide a great consumer experience, but for businesses they can be quite frustrating. With advertising as its primary source of revenue, there’s not much incentive on Google’s part to fix these problems, as long as the consumer experience remains strong and continues to attract eyeballs who can be shown ads.

So too, Google has long treated local as a special case of a big data problem that can be solved through large-scale algorithms and machine learning, resulting in a restrictive set of definitions that approximate the real world imperfectly. A classic example is service-based businesses, who are subject to Google’s prioritization of proximity in search even though they do not have physical store locations.

A different model driven by a different method of earning revenue, or a different way of thinking about local data and the realities behind it, would likely have different priorities. For instance, it might give legitimate businesses a much greater level of control over their online representations. Perhaps a true disruption in the whole approach to local, born of visual-first thinking, the metaverse, or some other innovation we cannot anticipate, will bring about this reorganization.

Google was founded in 1998; Google Maps launched in 2005. Though the company has been at the bleeding edge of technological development ever since, still those dates are telling. In internet time, Google is a senior citizen, and it stands to reason that it must eventually let the new generation have a say. Where are the startups who will unveil for us a new paradigm for local?