Meta Walks Back Hyperlocal Efforts
Meta has taken a crack at several local commerce initiatives over the years. That’s everything from Facebook Marketplace to Instagram’s new map interface. The thought is that its social graph can add unique value to finding things to do, buy, see, or eat locally. And that feeds into its core ad business.
But one of those efforts recently took a step back: Neighborhoods. For those unfamiliar, this was meant to be Facebook’s answer to NextDoor. The latter has validated the hyperlocal networking space with an engaged audience of neighbors who gather around everything from crime to classifieds.
But it turned out to be too onerous and unfocused, so Meta is pulling back and ending the service on October 1. To be fair, hyperlocal is not easy for several reasons (more on those in a bit). NextDoor succeeded despite a graveyard of hyperlocal startups from Patch to Backfence to Judy’s Book.
Masochistic Hyperlocal Ventures
As for reasons for sunsetting the effort, Meta is relatively quiet but we have a few theories. Before getting into those, it’s worth stepping back for context to examine how Neighborhoods came about. Meta first launched it to formalize geo-relevant social interaction that was already happening.
That activity was previously bubbling up internally on Facebook’s Groups, including things like neighborhood-centric gatherings to discuss local issues. The Neighborhoods format was meant to accommodate that behavior with something purpose-built, including content monitors (like Patch).
So, it launched the effort in 2020 and rolled it out first in Calgary. Positive results led to a Canada-wide rollout, followed by the U.S. That was the last we heard about the product until this news of its closure. Meta will now channel the activity and demand around Neighborhoods back into Groups.
As for those theorized reasons for Meta’s backpeddling, some are structural and some are temporal. Starting with the former, hyperlocal is hard as noted. Though Meta is competent in building network effects, hyperlocal networks require doing so in thousands of little insular pockets.
There are also quality-control issues. It’s difficult to apply a set of common standards across all those zip codes (Meta has enough trouble with that on the global level). It’s a cat-herding exercise that only the most masochistic of entrepreneurs dare venture into. Remember the hyperlocal graveyard.
As for the temporal reasons, we’re seeing several tech companies facing stringent times and paring back efforts that recently sprouted. Those efforts are now seen as bloat among investors in an environment of contraction. This is especially the case for any ad-based business models given macro headwinds.
So where will Meta divert that focus and investment? Some will go to its Reality Labs division where it’s building the future of its business. Some see that as the “bloat” mentioned above, given that it’s a far-future outcome. But you could argue that now is precisely the time to start building lifeboats.
But more practically speaking, reeling back on Neighborhoods could help Meta continue to focus on competing with TikTok. Several of its efforts and product updates over the past few cycles have done just that. For example, its contentious updates to Instagram’s feed are a direct shot at TikTok.
As for other impacts, the biggest thing that comes to mind is how this is probably good for NextDoor. Though it likely wasn’t excessively worried because it knows how hard it is to pull off hyperlocal (for all the reasons outlined above), it’s likely somewhat relieved that Meta is no longer trying to eat its lunch.