Insider Chatter by Donna Bogatin

What a local online classifieds coincidence!

I enjoyed breakfast this morning with Craig Donato, along with a hearty helping of “innovators dilemma” discussion about how the Web company he founded and leads–Oodle–is seizing a $30 billion market opportunity ripe for exploitation due to mass media incumbent inertia.

At the same time, the latest touted “online marketplace for local services” was making noise: GenieTown. The newly funded startup has been operational for many months, but is apparently now hailing an “official” launch. Founded and run by a Stanford PhD candidate, Hassan Chafi, the site’s raison d’etre reads like a computer scientist’s thesis proposal!

Although GenieTown sprung from Chafi’s humble need to “find someone to clean his apartment while working under stringent paper deadlines,” Chafi obtained his startup financing by proclaiming an esoteric sounding “local service lifecycle model.”

In GenieTown “Whitepaper” speak:

At the core of this model, is a customer-centric continuum that runs through a series of action phases, beginning with a customer’s intitial interest in a service, through the fulfillment of the service and the customer’s recommendation of the provider to others. For ease of reference, we name these action phases: Explore, Communicate, Transact and Manage. 

In GenieTown consumer facing marketing speak:

What is GenieTown? Chafi–who has declared himself Mayor of GenieTown–asks and answers: It is where “clever people connect to buy and sell local services.”

“People with skills, expertise, and passion in a wide range of areas use GenieTown to offer their services. These “Genies” build credibility and trust through answering questions from customers, submitting articles and giving competent advice. Through their contributions and jobs well done, Genies increase their ranking on GenieTown. GenieTown enables service markets to emerge and thrive by creating opportunities for people to express and demonstrate their abilities, ambitions and passions.”

Whether in feel-good marketing prose, or feel scientific engineering text, however, GenieTown is not delivering on its “clever” experience promise, and real world “genies” are not readily apparent. Browsing GenieTown’s “featured” listings surfaces an array of impersonal, canned, standard handyman sales pitches, and spam-like hawking of online ecommerce franchise properties. FOR EXAMPLE:

We are L’bel Paris 40 Years in the Direct Selling Industry selling fine french fragrances,skincare and cosmetics company. We are in 14 different countries and growing!
We are now expanding here in the United States.
We are looking for business minded individuals looking to start their own business selling cosmetics from our L’bel Paris catalog.
EXELLENT MONEY MAKETR! Make anywhere from 25%-50% commission.
We are Not a Mult-Level MARKETING COMPANY!
EXCELLENT OPPORTUNITY TO MEET PEOPLE
LOTS OF COMPANY SUPPORT! FREE TRAINING!
PLEASE CONTACT: AREA SALES MANAGER

How does one “Become a genie?”: “Join now, it’s quick and easy!”…AND free, and apparently anonymous and unverified!

How does a “Genie” get featured on the GenieTown home page? GenieTown advises one “Genie” called “Power Of Cash”  of GenieTown’s Stanford PhD advanced algorithm:

If you are wondering how to be displayed on the front page: the two genies featured are selected from our list of genies with portfolio pictures. To add portfolio pictures, log into your account, click on profile and scroll to the bottom of the page. This allows you to upload and organize your pictures.

GenieTown “Genie” “Power of Cash”’s profile:

Cash Leveraging Genious. I Help others receive Financial Glory..

You go, Mr. Power, thanks to GenieTown’s open (too open) platform! Despite all of GenieTown’s Stanford engineering credentials, the founding team has unleashed a supposedly local Web platform that is friendly to global, online spam.

Oodle has been striving to “improve the way people buy and sell locally” for several years, fueled by $19 million in venture capital backing. Oodle CEO Donato told me today that Oodle is on track to be cash-flow positive by the end of the year.

Both a destination site and a third-party distributor and aggregator, Oodle cites “30 million listings from over 80,000 classifieds sites,” except Craigslist. Donato believes that Oodle is nevertheless complementary to Craigslist, recommending that consumers use Craigslist, plus Oodle for breadth of reach.

Straddling both direct-to-consumer and link-to-classifieds sites approaches poses Oodle business model challenges, however. Last June, I asked Donato for his reaction to the eBay launch of Kijiji. SEE: Oodle CEO Q & A on eBay, Kijiji & Craigslist Classifieds

The Oodle CEO told me last year about Kijiji:

It’s great for consumers and it’s great for Oodle. Providing consumers with choice is alays a good thing. And consumers are increasingly getting more options to post free classifieds listings. Obviously as consumers use more and different marketplaces, Oodle becomes more useful. It’s also important to note that consumers don’t publish listings directly into Oodle. As a search engine, it is our goal to partner with all the classifieds marketplaces on the Internet, big and small, local and national.

It is important to note now, though, that consumers ARE publishing listings directly into Oodle. How will the Oodle business model be impacted by the new, Oodle direct stance?

STAY TUNED TO INSIDER CHATTER FOR MORE: PART II ON OODLE COMING SOON!

MORE:  Yellow Pages Get Reprieve? The Myth of King Google Local Advertising ROI and
Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS and
Google Beware: Facebook Takes Local Advertising Gloves Off, ILM REPORT and
Judy’s Book: What’s On Sale? WE ARE! Ten Reasons Why and
Spot Runner Sells For Rival Google: Local SEM Bandwagon Grows

ALSO: Craigslist Q & A: Classifieds Community NO ‘Walled Garden’ and Craigslist PR: Same OLD Media?

PLUS: Like.com to Entrepreneurs: It’s the Revenues, Stupid! and VideoEgg Rocks: Unveils AdFrames in Silicon Alley: Google Next?

CONTACT DONNA BOGATIN

Google Maps hopes to improve virtual neighborhoods, so does just launched EveryBlock, thanks in part to Craigslist. 

Craigslist, though, is VERY particular about bulk access to its treasure trove of user listings posted with abandon daily, just ask classifieds aggregator Oodle!

I was therefore surprised to see yesterday that EveryBlock launched proudly offering the latest “Missed Connections” and “Lost and Found” for the three cities it covers at present, “thanks” to Craigslist.

EveryBlock creator Adrian Holovaty hails as a competive advantage that EveryBlock has “forged relationships with governments” to make available civic information that “has never been posted online.” I noted yesterday, though, that the “fun from across the Web” lisitngs that EveryBlock also (re)posts ARE already available online, readily, such as Craigslist “Missed Connections” and “Lost and Found” for Chicago, NYC and San Francisco, the three EveryBlock founding cities.

I asked Craigslist CEO Jim Buckmaster last June about why the site restricts classifieds aggregators, such as Oodle, and classifieds mashup players, such as Listpic, from accessing Craigslist classifieds ads postings. SEE  Craigslist Q & A: Classifieds Community NO ‘Walled Garden’:

We have received vanishingly few requests from craigslist users that we open the site to companies that want to capitalize on the craigslist community–in fact it’s been quite the contrary, we generally receive complaints from users when sites create derivative services based on craigslist, particularly commercial ones.

SO, what about EveryBlock’s derivative serviced based, in part, on Craigslist, and commercialized via Google AdSense? To date, EveryBlock is redistributing 660 Craigslist user postings.

I asked EveryBlock how the site is physically obtaining the Craigslist listings. Holovaty told me:

We’re using Craigslist’s publicly available RSS feeds, pretty much every page has an RSS link.

YES, but there are Craigslist restrictions on how such publicly available Craigslist RSS feeds may be used, such as:

We offer RSS feeds so that our users can embed a little piece of craigslist into their personal blog or home page, or watch the best-of postings come rolling into their desktop news aggregator. Look for the RSS symbol at the bottom of each of our listings pages. craigslist RSS feeds are for your personal use only, and are not available for commercial use without first obtaining a license from craigslist.

Craigslist warns about “access to its RSS service” in its Terms Of Use:

craigslist offers various parts of the Service in RSS format so that users can embed individual feeds into a personal website or blog, or view postings through third party software news aggregators.  craigslist permits you to display, excerpt from, and link to the RSS feeds on your personal website or personal web blog, provided that your use of the RSS feed is for personal, non-commercial purposes only…you do not redistribute the RSS feed, and your use does not overburden craigslist’s systems. craigslist reserves all rights in the content of the RSS feeds and may terminate any RSS feed at any time.

SO, Will Craigslist terminate EveryBlock’s RSS feed at any time?

ALSO: Craigslist Q & A: Craig Newmark Philanthropy Matches Google’s Page and Brin and  EveryBlock: Why Hard Civic News TRUMPS Web 2.0 Anonymous ‘Fun’ and Craigslist vs. EveryBlock? UC Berkeley New Media Case Study and Craigslist PR: Same OLD Media?

CONTACT DONNA BOGATIN

ReachLocal forms strategic alliance with Google? Despite the creative PR positioning, the $68 million venture capital backed reseller of all major search engines’ text ads has simply gained the “privilege” of sporting an “authorized” Google AdWords reseller badge!

How is it that Zorik Gordon, Co-Founder and CEO, has been able to bank $68 million in financing WITHOUT such a “strategic alliance” with the number one supplier of search ads? ReachLocal has long been reselliing AdWords. Its new “official” Google reseller status comes on the heels of Google making a concerted push to bolster its third-party local field sales force for AdWords, cost-free to Google!

I have long underscored: Local Ad Sales War: Why Google is a Guaranteed Winner

While conventional blogosphere wisdom hails Google AdWords reseller deals as win-win-wins, it is Google, as usual, that is the BIGGEST winner of all:

Local merchants get the “hand holding” they need to get online, aka on Google?
Online directional media properties get the local ad fulfilment they need, from competitor Google?
Google gets a massive influx of local AdWords business, risk, and cost, free. YAY, for Google!

Local merchants may actually be on the losing end of the Google stick, perhaps couging up a 20% AdWords premium for the joy of “holding hands” with third-party sales reps, accordng to top Google exec, Sukhinder Singh-Cassidy.

While YellowPages.com self-describes itself as “a leading local search and Internet Yellow Pages destination” its business model includes strengthening the number one local search threat, Google, by re-directing in-house YellowPages.com SMB advertiser dollars to the Googleplex AdWords money-making machine.

Most ingeniuous of all for GOOG: Google gains big, new AdWords dollars from the authorized resellers themselves, slugging it out competing for Google “Sponsored Links” in competing to resell Google “Sponsored Links”! What’s more: They must also compete against guaranteed AdWords winner, self-dealer Google!

The not so virtuous Google rules AdWords circle: A search at Google for “local ads” yields Google.com as the prime, number one “Sponsored Link,” pushing “Google Local Advertising,” while ReachLocal and YellowPages.com bid their own AdWords CPC rates up, fighting against each other AND Google for the honor of reselling Google’s own product ON A COMMISSION FREE BASIS!

WHEW! Doesn’t sound like a $68 million worthy venture model to me!

Google, of course, prides itself on NOT doing business the old fashioned way, i.e., paying commissions to resellers. I dissect the Google AdSense BAD commission play in How Google AdSense FAILS Better Business Bureau. 

MORE: Google AdWords Plus Box: Local CPC Bidding War Unleashed! and Google Zeitgeist: $200 University Payola AdWords Scam 

ALSO: Is SEO the New Internet Porn? Lessons From Ning and Google and Sex On Ning: Sponsored By Public Service Google and Google Joins Blogosphere in Mocking Wikia Search: Jimmy Wales Defiant

PLUS: Web 2.0 Social Power Grab: Will Faraday Media Open Up? and Henry Blodget Braces For ‘Harder Times’: Silicon Alley Insider ‘Screwed’? and Kelsey: You’ll Still Have Yellow Pages To Kick Around Some More

CONTACT DONNA BOGATIN

Surprisingly, SEOs are surprised that the world’s largest retailer wants in on the world’s newest opportunity: search marketing!

News Flash: Wal-Mart’s Sam’s Club division efforts to help small businesses on the Web is old news.

Way back in In 2004, the warehouse retailer asserted its intention to be a service vendor of choice for its small business membership, brokering health insurance:

Providing insurance is one of the biggest challenges when competing for quality employees and improving retention. As the purchasing agent for small businesses nationwide, Sam’s Club continues to add services that benefit small business owners and enable them to improve their business efficiencies.

Sam’s Club sponsors the Small Business Administration’s annual Small Business Conference, underscoring “Sam’s Club serves more than 47 million members nationwide and nearly half are business members including entrepreneurs, owners and business operators. In addition to exceptional values on supplies and merchandise for small business, Sam’s Club also offers health insurance, health care services, merchant credit card processing and other marketing programs through a network of providers.”

What “other marketing programs”? 2004 also marked Sam’s Club entry into the Web services business, the company introduced a low price point hosted Business Web Sites service to members of its premium Business Plus program:

Sam’s Club is dedicated to providing a smooth, easy channel for businesses to grow using the resources of the Internet. Close to 70 percent of small businesses do not have an online presence because it’s just too costly or difficult to build and maintain a site. Our new Business Web Sites offering brings online promotion capability to even the smallest business in the true spirit of our low-cost philosophy. Companies typically would pay hundreds or thousands of dollars to develop a professional Web site, plus pay for ongoing support. Sam’s Club has dramatically reduced the cost to a price any business can afford.

Naturally, online marketing of Websites is a natural product extension to a Web development service package.

Rather than making for a “good laugh,” Sam’s Club savvy private label cross-selling of Web products to its engaged base of open-to-spend small business customers makes for good prospective business.

Sam’s Club Online Services is a smart move, for Wal-Mart and for its Web services supplier partner, Innuity:

Innuity is a publicly held, Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver solutions for small business. The company’s Internet technology is based on an affordable, on-demand model that allows small businesses to interact simply with customers, business partners and vendors and efficiently manage their business. Using Innuity’s on-demand applications, small businesses can grow their revenues, reach and serve customers and run everyday operations.

Leveraging its reseller deal with Wal-Mart, Innuity aims to increase its “mass market retail distribution” in 2008. Amerivon has been retained by Innutiy to “broaden its mass market distribution strategy”:

The Amerivon retail agreement to further penetrate the mass retail market with our small business information solutions puts Innuity on an accelerated customer acquisition path. We are extremely pleased to have partnered with such a respected leader in the mass market distribution community and are looking forward to establishing long-term relationships with a wide variety of mass market retailers.

Mass market SEO/SEM? NOT such a novel concept. SEE: Local Ad Sales War: Why Google is a Guaranteed Winner

MORE ON LOCAL: Google AdWords Plus Box: Local CPC Bidding War Unleashed! and
Google Apps & Maps: Enterprise and Local Business STILL Missing and
Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS and
Google Beware: Facebook Takes Local Advertising Gloves Off, ILM REPORT and
Citysearch’s Herratti on Social Media and Merchant Reputation: ILM INTERVIEW and
Jason Calacanis: ‘Wrong About Local Too,” ILM REPORT and
The Future of Local IS (Google) Search: ILM REPORT and
Local is Global: $134 billion in Yellow Pages, Classifieds and Internet Advertising, ILM REPORT

CONTACT DONNA BOGATIN

Every Google product enhancement, minor or otherwise, worthy or not, is pushed to an eager fan base with great fanfare.

Google’s pre-Thanksgiving “treats”: “Think globally,” mark globally,” a map product fix cum upgrade and “A new bulk upload dashboard,” making it easier than ever to feed Google’s “universal search” with the content of others via Google Base.

Google’s “adjustment” to its map functionality may be heralded as a Google move to “open up” to users by “wikifying” the experience, but Google itself acknowledges that its maps actually send people to the wrong final destinations, even those seeking to party with Googlers! Hoping for mass citizen corrections of Google Maps to make them meaningfully better for the masses is undoubedtly a long shot.

More (in)famous Google wishful thinking:  Google’s $10 Local Search Pipe Dream: Slave Wages to Squeeze Yellow Pages 

Google Base? Long gone are the days when THAT product was feared as a big, bad classifieds “killer.” Peter Zollman had warned “People in the classifieds business have to assume that Google is coming at them full force.”

The New York Times, on the eve of Google Base takeoff November, 2005:

Several industry executives and analysts said they believed that Google Base was an aggressive first step in a series of maneuvers that would position the company as a powerful player in the $100 billion annual market for classified advertising. The general industry perception is that Google could potentially transform that market, which has already been shaken by the rapid shift to online searching and the free listing services offered by Craigslist.

“It’s very clear that Google is planning to launch a classified advertising product,” Peter M. Zollman, publisher of Classified Intelligence Report, an industry newsletter. “It will be a huge threat to traditional classified businesses.”

Two years later, the classifieds force is still NOT with Google, as far as Google Base has shown. Craig still rules, even as Craigslist minority shareholder eBay strives to steal Craig’s thunder via Kijiji!

Can Google Map Out the Future of Local Search? I analyzed earlier in the week. No strong evidence of a Google landslide to date, however; The Google hands-off, automated, self-serve ”magic” GOOG fuel is cost-effective but not effectively converting a critical mass of local merchants or local consumers.

Perhaps we will know more about Google’s local ambitions soon. I have the pleasure of sharing the final day Kelsey Interactive Local Media Conference honors with the Director of Google Earth & Maps, John Hanke, next week in Los Angeles.

Following the Hanke, of Keyhole fame, ”keynote” on how Google is “contributing to the local ecosphere via local search, maps, directories, and classifieds.” I will be joining Kelsey analysts on stage, tasked with opining on the state of local online: “Revolution, or evolution.”

Last week, I presented the revolutionary ambitions of local contender AnchorFree, SEE AnchorFree CEO: Hotspot Local Ad Network Beats Google, Yahoo, INTERVIEW

AnchorFree’s local wi-fi revolution is nevertheless already being contested by powerful incumbent CBS Outdoors, as I report and analyse in CBS To AnchorFree WiFi: WE Own The Ad Billboard, Online AND Off.

WHAT ELSE IS UP IN LOCAL SEARCH? Learn all about it next week at the upcoming Kelsey Conference on Interactive Local Media in Los Angeles!

SEE YOU THERE? CONTACT DONNA BOGATIN

IN THE MEANTIME, READ MORE:

Stepan Pachikov: EverNote Web 2.0 Perfect Mobile Storm To Hit in 2008, INTERVIEW

MerchantCircle CEO Aims To Disrupt Local Advertising $39 billion Spend: INTERVIEW

Naked Google Maps: NO Local Ads For Hungry Motorists

Local Ad Sales War: Why Google is a Guaranteed Winner

Google, Yahoo CAN’T Crack Local Ad Sales Code

Yahoo Wants $12 billion Local Search Ad Spend, So Does CitySquares

1-800 Pay-Per-Call: Marchex Buys VoiceStar, $4 billion Local Advertising Bonanza?

Google Local Search Gold Mine: When Does Google Cash In?

RH Donnelley Means Business.com: Google Feeling Vertical Search Heat

Judy’s Book has a special answer today to its homepage question, ”What’s on sale near you”: WE ARE!

Founder Andy Sack chronicles the latest chapter in the ongoing saga of the site characterized by Seth Godin upon its founding in the summer of 2004 as a “sort of Craigslist meets Zagats meets Orkut.” At the time, Sack himself expressed ambiguity about what Judy’s Book really stood for, posing company “positioning questions” out loud while seeking venture capital funding.

Zack actually began “modifying” the raison d’etre of the newly funded online “local” play way back then, even as it was in the process of officialy “coming out”:

I’ve been thinking about modifying the positioning of Judy’s Book…one thought is to postion the company as the world’s largest blog on local services, my other related thought is to actively pursue the group blogging space.

Astonishly, Sack also revealed his own significant doubts about what he nevertheless self-described as his “hot new ‘local-search’ startup idea”:

I’m concerned that Judy’s Book doesn’t yet solve a problem that needs to be solved everyday–or more accurately, that it isn’t yet a solution that engages sticky membership (return visitors).

Surprisingly, $2.5 million in venture capital financing was indeed allocated to Sack’s nebulous “idea” by Ignition Partners and Ackerley Partners.

The lack of deciciveness of Sack and his Judy’s Book is not a matter of one time start-up jitters. Judy’s Book has radically changed both its rasion d’etre and business model, at will.

Despite Judy’s Book’s propensity to redo what it does, Sack’s admission of defeat today stems from what Judy’s Book set out to be: A user generated content platform for local reviews.

The consumer local review business model entails inherent challenges, from both the user and advertiser perspectives. Here are ten reasons why:

USER GENERATED LOCAL REVIEWS
Attraction and retention of posters and readers,
Haphazard quality of consumer review contributions,
Hidden agendas of anonymous posters,
Sarcastic, promotional and revenge reviews,
Obsolesence of reviews and business listings…

LOCAL MERCHANT ADVERTISERS
High-cost, high-touch, long sales-cycle,
Low price point of ad products,
Resistance to uncontrolled consumer environment,
Lack of proven ROI…

AND…SCALABILITY ISSUES!

What’s next, for Sack, Judy’s Book and the local search space?

Sack: Looking forward to his next (fifth or sixth) startup,

Judy’s Book: Operations scaled back and seeking a strategic acquiror,

LOCAL SEARCH SPACE? Learn all about it at next month’s Kelsey Conference on Interactive Local Media in Los Angeles, where I have the pleasure of speaking on the closing “Big Thinker” panel!

SEE YOU THERE? CONTACT DONNA BOGATIN

ALSO: Path 101 to LinkedIn: We Like Your Business, and Cash and Salesconx Will Monetize Your Rolodex: LinkedIn Beware? INTERVIEW