The Praized Blog

As the year ends, here are, in my humble opinion, the most important news and trends of the year in local search and social media (in no specific order):

• The major challenges of the newspaper industry. Declining print readership, challenges with monetizing the Web, user fragmentation, lay-offs, stock value decline, etc. 2008 was a very difficult year for the newspaper industry and I don’t think 2009 will be easier with the slowdown in ad spending.
• Mobile, iPhone & the app store. The launch of the iPhone 3G and the arrival of new “iPhone-killers” devices signaled the beginning of a real tipping point in mobile local search and social media usage. The launch of the iPhone app store also created a new ecosystem leveraging the iPhone’s installed base. At the end of 2008, building an iPhone application is as “hot” as building a Facebook app was a year ago.
• Social Media (Facebook, Twitter, Friendfeed, LinkedIn). Continued usage/buzz growth in social media especially around these four Web properties. Social and user-centric functionalities are a must-have today. Some difficulties around monetization of social media inventory though.
• Identity (Facebook Connect, OpenID, Google Friend Connect). With the rise of social media come major challenges around personal identity on the Web. Large social properties want to become that official provider of identity. Will explode in 2009.
• Local video. This was the hottest new ad product at directory publishers everywhere. I’m convinced that the technology is now a commodity but I’m wondering if the product itself will also become a commodity in the near future (i.e. you need videos in your local search site like you need maps, URLs and click-to-talk buttons)
• Sobering presentations from directory publisher executives at each Kelsey conference in 2008. More realistic, a clearer view of opportunities and challenges in the industry (great assets, local search industry is booming but erosion in major metro areas, etc.). What used to be said behind closed doors is now mentioned openly.
• Drastic drop in directory publishers stock prices. Deadly combo of credit crunch, slowdown of the economy, too much debt and market perception. Idearc is delisted after losing 99% of its value. RHD also loses 99% of its value. Similar (although less drastic) situations in Europe and Canada.
• Microsoft’s failed Yahoo takeover (a proposed buy-out at $31 a share) occupied a good portion of tech news early in the year. This would have a created a very interesting company to compete against Google (desktop technology + social media + search). Jerry Yang, Yahoo!’s co-founder, made sure the deal wouldn’t go through. Yahoo!’s share is now hovering around $12.00.
• AOL buys into the social-networking game with Bebo. A cool $850 million…
• Geolocation in browser (geode, loki, Google Gears). We’ve seen the first elements of this in 2008 but this is a potential game changer, transforming every web site into a local destionation
• Facebook replaces their own classifieds with the Oodle platform. In a move I found very surprising, Facebook outsourced local classifieds clearly showing that they don’t realize they’re in the local search space.

In the last couple of weeks, I’ve been reading the various news around the newspaper industry: fundamental reorganizations, large-scale layoffs, difficult collective agreement negotiations.  But not all is doom and gloom. According to an MS&L survey, discussed in Advertising Age, “84% of digital influencers go online to find out more about something only after first reading about it in magazines and newspapers or hearing about it on TV or the radio. ”

Most of my readers know I’m a newspaper junkie. Ten years ago, I was subscribing to 3 daily papers.  Today, none.  I still buy the Saturday print editions (for my US readers, Saturday editions in Canada are the equivalent of Sunday editions in the US) of two newspapers though. But, guess what? I’m not consuming less news than 10 years ago. In fact, I think I consume more news today but its format has changed. We have access to news 24/7 on a variety of offline and online medium.  I watch news on TV in the morning before leaving for work, I listen to news on radio while surfing media web sites on my mobile device during my public transit commute, I get news pushed to me by my Twitter and Facebook friends, I read the free transit daily newspaper during my lunch hour, I do the radio/mobile Web thing in the commute back and I often catch the late night news (at 10pm here).  Did I tell you I love news and newspapers?

The challenge with newspapers is not overall readership.  It’s about user fragmentation and how to monetize those fragmented eyeballs.

The print version used to represent 100% of readers and 100% of revenues. Now, that version represents a smaller percentage of readers but still a large chunk of the revenues. According to a report published by ContentNext, the New York Times ”would have to increase page views sixfold on its Web site–roughly on par with msnbc.com and Yahoo News–in order to equal revenues on the print side.” (source: Mediapost). Monetization is clearly an issue. BTW, any company that comes up with a better model to monetize online news will be very rich. What this means is that newspapers now need to extend their content to multiple media (print, online, mobile, etc.) in order to, at best, maintain their revenue levels.  Expansion in other media might mean future revenue growth but right now it’s mostly about short term sustainability.

Source: swanksalot on flickr

Which brings me back to the very difficult collective agreement negotiations we’ve been hearing a lot about in the last 12-18 months in the newspaper industry. Warning! I’m sure that what follows is a gross oversimplification of the situation but that’s the way I see it. As an outsider, I feel the main sticky point in negotiations is often around the ability for newspaper organizations to re-use content in multiple media. Unions are usually very much opposed to it.

My question to union organizers is: what if there’s no turning back?  What if newspaper organizations are now facing radical changes which requires them to extend the journalists content to multiple media without having the ability to increase resources?

My question to newspaper management is: why isn’t there more open discussion around that fact? Why is the union perception still that this is about creating “more” revenues? And why don’t you offer financial upside to journalists in case online monetization picks up in the future?

Radical industry changes require a new type of labour relations but that’s not what I see today.

Over on the Praized Media Product blog, more details about the award received by my startup at the Boomerang Interactive Awards.  Yeah!

In  a op-ed column titled “While Detroit Slept“  in the New York Times this morning, Thomas Friedman talks about the US auto industry on the eve of a massive government bailout.  He says:

As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.

What it means: The troubles of the US car industry remind me of the issues facing traditional media today. US car manufacturers have (had?) a very profitable product line (SUVs, trucks), media publishers have a very profitable product line (print, TV, Radio).  Along comes a very disruptive environment created by a perfect storm of elements (credit crunch + high price of gas + lack of innovation in smaller cars & renewable energy technologies) and it creates a death spiral requiring government interventions to save jobs and companies.

Traditional media is also potentially at risk and might be facing that same perfect storm in the near future. Elements like high growth of Internet usage & revenues, slow decline in offline reader/viewership, high level of debt in many media companies, lack of innovation online (in some cases) and a negative perception (TV is dead, Newspapers are dead, Yellow Pages are dead, etc.) introduce challenges, that combined together make it difficult to surmount. I believe media publishers need to work on two fronts to avoid this situation: 1) they need to invest massively in online & mobile, increase innovation, reward risk-taking and allow project failures (but fail quickly if needed). 2) they also need to win the PR/communications war. Media need to embrace the Web, join the online conversations, prop-up successes but admit failures as well. I’m a firm believer in (and a staunch defender of) traditional media but the time for action is now!

The most recent Trendwatching newsletter (sent to me by Eric Baillargeon) covers two trends of note:

Feedback 3.0 which they describe as being “all about companies joining the conversation, if only to get their side of the story in front of the mass audience that now scans reviews. Expect smart companies to be increasingly able (and to increasingly demand) to post their apologies and solutions, preferably directly alongside reviews from unhappy customers. Expect the same for candid rebuttals by companies who feel (and can prove) that a particular review is unfair or inaccurate, and want to share their side of the story.”

Mapmania is all about map mashups and local content. Why is that happening?  According to them, “Geography is about everything that is (literally) close to consumers, and it’s a universally familiar method of organizing, finding and tracking relevant information on objects, events and people. And now that superior geographical information is accessible on-the-go, from in-car navigation to iPhones, the sky is the limit.”

What it means: Feedback 3.0 is definitely the normal evolution.  Companies (even small ones) are now realizing that there’s a lot of activity going on around their “brand” and with the rise of social media, store owners (or their employees) are now becoming savvier.  They should embrace this opportunity to join the conversation, learn from their mistakes or correct misconceptions.  They should also corral their loyal customers and ask them to become their evangelists online.  As for Mapmania, I obviously agree that we’re getting close to the “Local Wide Web“.  I think maps are an intrinsic part of local search (no service should be without maps) but I’m not 100% convinced local search user navigation needs to always start with a map.

Sylvain Carle has a post on “distributed identity” today on his personal blog . As I noted last week in my Web 2.0 communities Trends post, “identity” is one of the key elements of Web 2.0 communities. Recent news (from the last few days in fact) shows that this a very hot topic. Facebook officially launched its Facebook Connect program (and its partnerships with Digg and Hulu), I’ve been playing with Google Friend Connect on Guillaume Thoreau’s blog, SixApart announced Typepad Connect, Wordpress is quietly preparing Buddypress and the “open stack” with OpenID and oAuth is still out there as open options to those proprietary log-in systems.

What it means: controlling identity is one of the next big wars on the Web. Only sites/systems that have large install bases of users (Google, Yahoo, MSN, Wordpress, SixApart, etc.) can hope to fight this battle. If you haven’t been collecting user information (like e-mail addresses), you will be dependent on these large identity networks. That’s not a bad thing though! This will allow you to jumpstart any initiative that requires your users to log-in. As long as users give you permission to access their data, you’re still ok. Main challenge: will users trust private companies will their identity information? Or will open standards triumph in the end? BTW, if you’re a media company and you’re still tied to a large ISP, you could be one of those big identity providers (even through OpenID). There’s still a play for you.