Google Shutting Down Local Business Referrals Program

Back in August of 2007 Google announced their Local Business Referrals Program. A lot of people shook in their boots, others doubted any success. I suspected that it was doomed to fail.

I just don’t see Google coming into this space, sprinkling it’s Google fairy dust on the marketplace and voila – cracking the code. OK, so maybe Google’s isn’t trying to crack the code, but just penetrate the market a bit more than they’re able. Google should want to penetrate this space, of course they should, but doing it themselves? Gimme a break! And this approach is just silly. I kind of get the sense that this is a desperate move by an increasingly clumsy and goofy corporation that will yield very little. Next step for Google? Snatching up local search players.

Success in the local search market will not come from a giant like Google or Yahoo or Microsoft. It will come from the small startups like, well, like CitySquares.

Here’s Matt McGee’s post on the demise of the program, which gives some more detail. Here’s what Google had to say:

On December 31, 2008, we will end the Google Local Business Referrals program, which was one of many Google Labs initiatives that we had developed as part of our ongoing commitment to experimentation and testing new ways to help businesses establish a presence online.

Many relationships have been built as a result of Google Local Business Referrals, and local connections between representatives and businesses have been forged that we hope will continue. However, the program will conclude at the end of the year as part of our effort to ensure that we prioritize our resources and focus more on our core search, ads and apps business.

So, what’s next for Google and their local ambitions?

Google’s Feet On The Street

On Monday Google announced their Google Local Business Referrals (LBR) program in which “local representatives” (essentially 1099 contractors) are paid to a) collect local business information, b) submit that information to Google’s map/listings services, and c) spread the word about AdSense. Google will pay it’s local reps $10 for each business submitted, but not so fast. Here’s what Google says:

You’ll visit local businesses to collect information (such as hours of operation, types of payment accepted, etc.) for Google Maps, and tell them about Google Maps and Google AdWords. You’ll also take a few digital photos. After the visit, you submit the business’ info and photo(s) to Google.

You can earn up to $10 for each approved, verified referral you submit. This includes $2 when a business referral is approved by Google; and $8 when an approved business verifies that the information you submitted is accurate. Referrals are approved by Google based on the completeness and quality of data supplied by representatives. Businesses verify their information either by sending us a response postcard or verifying their information online. As long as your earnings total at least $25 a month, you’ll receive a monthly check.

Well woopie-doo! Donna Bogatin articulates quite well what I think of all this:

Google has announced various partnering schemes with the goal of piggybacking on small business sales force and distribution assets of other companies, such as 1) a Verizon partnership to “marry its “sales channel opportunities with Google’s vast advertising network” and 2) a Intuit QuickBooks referral button deal to “help small businesses to attract new customers.”

Despite Google’s efforts to leverage the sales efforts of third-party companies, however, the local ad market remains elusive. Not surprisingly, Google can’t even garner sufficient “freebie” Google Maps listings it offers local merchants.

Google is undeterred. Sheryl Sandberg, VP Global Online Sales & Operations, said of the local opportunity last year:

As people do more local search on Google, we provide greater opportunity for local advertisers. In that area we think the market is widely under penetrated, it sounds surprising to a lot of us, but even in the United States, arguably the most developed market in the world for ecommerce less than 50% of businesses even have a Web site, or let alone advertisers, so we think there is tremendous opportunity to bring those people online and bring them into our advertising product.

Is Google biting the “feet on the street” sales force bullet, then? NO! As usual, Google believes it can get away with playing by its own business rules.

I think Google is way out of it’s league here. I’ve often believed that Adwords doesn’t really even make sense for much of the local merchant market, unless they’ve got an active eCommerce function.

Donna goes on:

The Googley local ad sales solution is to offer slave wages to U.S. residents: $2-$10 for hours of labor intensive one-on-one cold-calling, prospecting, ad creative development and sales closing.

What is the going local ad sales market rate? Erron Silverstien, former Citysearch exec and founder of local search play YellowBot recently told me a successful close of a local merchant entails, on average, a $500 investment.

Does Google know better? NO! Google believes it can get away with solicting U.S. adults with a pennies on the dollar pitch: That is the Google Local Search $10 pipe dream!

Greg Sterling takes a practical approach:

Yet unless there’s radical simplification (”just tell us how much you want to spend monthly and we’ll do the rest”) there’s still the issue of the learning curve and complexity of self provisioning for local businesses.

But this is one more piece in a diversified Google strategy to reach the local market.

Matt McGee has quite a bit to say about this matter, and in summary he also believes it will be a failure. Matt says:

I think it’s naive to think that people are going to jump at the chance to knock on the doors of local businesses, take photos inside, promote Google Maps and Google AdWords, fill out paperwork, submit it all online when they’re done, etc., out of the goodness of their heart. You have to provide a better benefit than “you’ll be helping your community find local businesses.”

I just don’t see Google coming into this space, sprinkling it’s Google fairy dust on the marketplace and voila – cracking the code. OK, so maybe Google’s isn’t trying to crack the code, but just penetrate the market a bit more than they’re able. Google should want to penetrate this space, of course they should, but doing it themselves? Gimme a break! And this approach is just silly. I kind of get the sense that this is a desperate move by an increasingly clumsy and goofy corporation that will yield very little. Next step for Google? Snatching up local search players.

Success in the local search market will not come from a giant like Google or Yahoo or Microsoft. It will come from the small startups like, well, like CitySquares.

Marshall Phelps

Marshall Phelps

Originally uploaded by Benee

Very candid conversation with marshall Phelps, corporate VP and deputy general counsel at Microsoft. Very frank, straight talker. Great honesty about the end of the os and about google’s advantages and challenges.



Ben Saren



Sent from my BlackBerry

Google and the Sleeping Giant

There’s been a lot of talk in the mainstream media and in the blogosphere lately about Google’s acquisitions, Microsoft’s acquisitions, and whose acquisitions were better, or meant to block the other. It’s good stuff! Really good stuff. I’ve got a few opinions about this stuff, like anyone watching the developments from afar, but I don’t feel that I’m that much in-the-know so I choose to just sit back and observe and learn from it all. Over the past few days there have been some more developments in this Google vs. Microsoft hype that’s really been interesting to watch, including Microsofts acquisition of aQuantive. I think all this stuff has a big impact on me and on Citysquares actually.

I follow Don Dodge’s blog, and Donna Bogatin of ZDNET, and others like those in my blogroll (to the left). These folks all have strong positions and views of Google and Microsoft, and their transactions and supposed strategies.

I’m a big Microsoft fan. Maybe because I grew up on Microsoft and I’ve been certified in a variety of Microsoft products and skills (e.g., MCSE W2k + Active Directory). I am fairly savvy with ASP and .Net, with SQL, Active Directory, Exchange, etc etc. I’m just a loyal Microsoft guy. I didn’t choose .Net, SQL, Windows Server for Citysquares. I chose LAMP technology instead, for reasons I won’t go into here and now, but in short because it’s just a better development platform, IMHO.

I use Vista.
I use Office 2007 – I don’t ever see myself going to and Google apps.
I use MapPoint 2006. Yet Citysquares’ uses Google Maps.
I don’t use Hotmail except for my Messenger services. Yet I do use Gmail, and I do use Google Talk.
I don’t use MSN, ever. But my home page is my super-customized Google page (iGoogle).
I use MS Money 2007, and love it.
My preferred search engine is Google.

In my life Google has a place, and Microsoft has a place. I see Google as trying to push into too many places – and I don’t like that. It’s sort of like watching a teenager who has too much freedom, money, and independence. Maybe it’s more like the way Donna Bogatin put it – Microsoft is a sleeping giant.

Only time will tell and in the meantime I’ll continue watch this like I watch the Boston Red Sox and the NY Yankees.

Creating the next Google?

Another interesting little piece in the NY Times. So they’re going to go head to head against Google eh? OK, even with the punches Google has been taking lately I think going toe to toe with them is futile. It’s like the Swiss Army going up against the US Army – it’s laughable. However, after the laughter, one must also acknowledge the balls these companies have going up against Google. I admire it. Google, like Microsoft and like IBM, cannot maintain it’s position at the top forever – it’s not natural and it’s not realistic to think that any company can be #1 for ever (on the Internet anyway) – other industries is a different story (e.g., GE, Wal-Mart). So at some point, someone will take Google down from the perch, even if briefly. I don’t see it happening for many years. And when it does happen, I don’t think search will be like it is today (text based, search engine websites, etc). The Internet is still in its infancy, or it’s a toddler, I’m not sure. But at 13 years old (out of the womb), it’s still very immature. I just think that any company that really wants to compete with Google, and their visions of artificial intelligence better step WAY out of the box, think WAY long term, and start to plant those seeds. Google has a big leg up on the competition.

Google – love ’em or hate ’em – they’re like the moon, pulling and pushing the tides of the Internet and they have the power, and will continue to have the power, to shape what tomorrow’s Internet has to offer.

My Predictions for 2007

Everyone (well not everyone) seems to have a forecast for 2007, as it pertains to everything – the new Internet (Web 2.0, if I may be so bold), technology, gaming, world peace, and politics. Well I’m going to join the masses and put my foot in my mouth. I’m writing this while in a rush, so my tone may sound a little hasty and rushed. Forgive me! Hey, now I haven an excuse when my predictions turn out to be crap. Here goes it:

MMOGs will take center stage: Games/destinations like Second Life and World of Warcraft will continue to evolve and develop even larger communities. MMOGs may even be attributed for redefining the new Internet in years to come. I firmly believe that these virtual worlds are just the beginning of what we’ll see online in years to come. I can only imagine what they’ll be celebrated for in 10, 15, 20 years. But my prediction is only for 2007.

Longhorn and Office 2007: Microsoft will be disappointed, as will consumers and businesses. Longhorn will be adopted by, who else, early adopters. Office 2007 too. Ultimately, the general business and consumer populations will not go wild over Longhorn as predicted by some, and as compared to Windows 98. I just don’t see it happening. MS has fallen short too many times and has been in the spotlight too often over the past couple of years. People will be wary. And frankly there’s just nothing really all that compelling about Longhorn and Office 2k7 to make it very desirable. Of course there are some nice GUI and UX changes, but I just don’t see that as being enough. Time will tell and in later 2007 I think we’ll see more momentum.

Google will take it on the chin: With the recent Orkut outage, the skeptism over Spreadsheets, Google’s arrogance, and with Yahoo! making interesting moves, I think Google is going to get bit by reality pretty fast in ’07. Something, I don’t know what, will hit them – perhaps a big lawsuit, perhaps competition, perhaps a failed product or acquisition of high profile will take Google of their high perch. Granted, they’ve got the cash, but in terms of general perception out there, I see a trend. I agree with Michael Arrington’s strong position on this as well. I’m not sure I’d go so far as to call it a tipping point though. I think their best days are yet to come.

Social Networking will shake out: I think we’ll start to see more of these vertically specific social networking services disappear. I don’t see social networking sites for sushi lovers taking off or being profitable businesses. I don’t get a lot of them. Yet they get funded. Call me traditional, but I think the hype will start to fade. Social networking will continue to appeal to very large audiences with less super-niche focus. I do think niche is good, but come on – some of these super-niche social networking services out there just make me giggle.

Widgets: Here they come. Watch out! They’ll start to make sense soon. I look forward to having better widgets than I currently have in DesktopX. I look forward to more practical uses.

First amendment (1/17/2007): See here.

Yahoo! steps back in the ring. MSN/Live still struggles: Yahoo! will come back into the limelight and really shake things up. MSN and Live will continue to struggle and stagnate.

Local Search: Local will continue to be all the rage in ’07, and a couple new players will take center stage (preferably Local search will change somewhat. Those with more editorial content and social elements will prove to have the strongest legs, especially those who are able to monetize their traffic. Merchants are going to be looking for more meaningful value prop than just eyeballs – an interesting reality check for those big boys out there. The current, larger players out there will continue to struggle selling to the local merchants. They just don’t get it.

Xbox kicks ass, PS3 stuck in the mud, Wii is just plain fun: Sony screwed up, big time. And the xbox is just a better product. The wii appeals to leisure gamers, less hardcore gamers, and is simply a lot of fun.

iPods get boring: Yep you heard me. Apple will do what they always do. Create a very cool, pop culture product but ultimately Jobs will get his head stuck up his ass and someone (Creative Zen?) will do it better and Apple will start to lose their grip on market share. People are tired of iPod already. Trust me on this.

RSS: Continues to be adopted by just about everyone and anyone. More and more content simply becomes syndicated. Someone will figure out a really cool way to make a lot of money with their syndication. Honestly? Keep your eyes on NY Times. Call me crazy! No really…

World Peace: Not a chance on Earth. Sorry folks. The religious wars are just beginning. You may start to here chatter about WWIII. Sorry to sound so dooms day, but really, the war with Muslim extremism has just begun. It won’t end for many years. The real opening salvo of our time was 9/11. But I believe that worse is yet to come – maybe not on our soil here in the US, but elsewhere for sure. Iraq will continue to worsen until a new US President is elected. While the new President, much like the current, will have a major agenda, the global conflict with Muslim extremism will take the spotlight.

Politics: I think we’re done with the major scandals for a few years. But I see things really heating up between Barack and Hillary. McCain and Romney will go at it too, but Mitt will be less relevant come primary season. Keep your eyes on John Edwards – he’ll do well in Iowa and gather more love from the ladies. He’ll be a contender. A new republican will show up too – no more neo-cons. This one will be a new kind of republican. He’ll do well but won’t go all the way. But he’ll inspire a new generation of republicans.

Sopranos: Will be the talk of the nation! It will be confusing, it will be strange, but it will be a total shock fans all over. I don’t think Tony will die. But I think something big is coming. I just hope it doens’t end like Seinfeld. I get the way Seinfeld ended, I really do, but I think David Chase has something real special for us.