Insider Chatter by Donna Bogatin

It’s official. The two high profile local sites backed by power money and power people have now both conceded defeat: InsiderPages in the Spring and now Backfence.com.

The outcomes? InsiderPages local merchant reviews site at least had the fortitude to recoup some value in a distress sale of its assets to IAC and Citysearch. Backfence.com “hyperlocal” citizen journalism effort, though, was left to just wither away. Even the founder’s farewell post seemingly garnered no readers.

The moral of the local Web stories: Venture capital backed business plans and industry goodwill are not a formula for local success. If local WAS a “problem” that could be solved by throwing money at it, Google would be the undisputed go-to destination for ALL things local, but it is not.

Google benefits from implicit local searches being conducted at Google.com AND is doing all the “right” product moves: 1-800-GOOG-411 free directory assistance, free local merchant Google Maps listings and coupons, user-generated local reviews. Nevertheless, Google is one player among many contenders in the local space and has no proprietary local domain knowledge or assets.

Moreover, the Google self-serve, automated, technology driven mindset is not compatible with the high touch needs of the local market. From both the consumer and merchant perspectives, local is a one-off business. Google can easily build a local platform, but the Goolgeplex is hard pressed to populate its local services on the scale that it hopes for.

What Google IS succeeding at in local, though, is squeezing out all other local players at Google.com and with its ancillary services: Citysearch, AOL, Zagat, YellowPages, Jingle…

BUT, by setting its own dominant place at the Google local table, Google risks damaging its AdWords business with incumbent and new local services, same as it hurt its eBay AdWords business when it went after PayPal.

Does Google care? NO. The world needs Google, more than it needs the world, is the Google line, and the world falls for it.

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CONTACT DONNA BOGATIN